As filed with the Securities and Exchange Commission on October 5, 2012

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Ruckus Wireless, Inc.

(Exact name of registrant as specified in its charter)

Delaware

3577

54-2072041

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

350 West Java Drive

Sunnyvale, California 94089

(650) 265-4200

(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)

Selina Y. Lo

President and
Chief Executive Officer

Ruckus Wireless, Inc.

350 West Java Drive

Sunnyvale, California 94089

(650) 265-4200

(Name, address,
including zip code, and telephone number, including area code, of agent for service)

Copies to:

Eric C. Jensen

Michael E. Tenta

Cooley LLP

3175 Hanover Street

Palo
Alto, California 94304

(650) 843-5000

Scott Maples

Vice President Legal & General Counsel

Ruckus Wireless, Inc.

350 West Java Drive

Sunnyvale, California 94089

(650) 265-4200

Christopher L. Kaufman

Brian D. Paulson

Latham & Watkins LLP

140 Scott Drive

Menlo Park,
California 94025

(650) 328-4600

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities
Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated
filer ¨

Accelerated
filer ¨

Non-accelerated
filer þ (Do not check if a smaller reporting company)

Smaller reporting company ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered

Proposed Maximum AggregateOffering Price(1)(2)

Amount of

Registration Fee(3)

Common Stock, $0.001 par value per share

$100,000,000

$13,640

(1)

Estimated solely for the purpose of computing the amount of registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Includes shares the underwriters have the option to purchase.

(3)

Calculated pursuant to Rule 457(o) under the Securities Act of 1933, as amended, based on an estimate of the proposed maximum aggregate offering price.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration
Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We and the selling stockholders
may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any
state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued October 5, 2012

Shares

Common Stock

This is an initial public
offering of shares of common stock of Ruckus Wireless, Inc.

Ruckus is offering
of the shares to be sold in the offering. The selling stockholders identified in this prospectus are offering
additional shares. Ruckus will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per
share will be between $ and $ . We intend to apply to have our common stock listed on
under the symbol RKUS.

We
are an emerging growth company as the term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements. Investing in our common stock involves
risks.

See Risk Factors on page 11 to read about factors you should consider before buying shares of our common
stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Per Share

Total

Initial public offering price

$

$

Underwriting discount

$

$

Proceeds, before expenses, to Ruckus

$

$

Proceeds, before expenses, to the selling stockholders

$

$

To the extent that the underwriters sell more than
shares of common stock, the underwriters have the option to purchase up to an additional shares from us
and the selling stockholders at the initial public offering price less the underwriting discount.

The underwriters expect
to deliver the shares to purchasers on , 2012.

Mobile data traffic in the US is expected to grow 153x from 2010 to 2020 while US cellular network capacity is expected to grow 25x
over the same period

The carrier Wi-Fi market is expected to grow from $296 million in 2011 to $2.8 billion in 2016[1]
while the enteprise Wi-Fi market is expected to grow from $3.4 billion in 2011 to $6.9 billion in 2016.[2]

Heres
our little secret there is a solution to the performance and capacity conundrum, and were letting the cat out of the bag.

We have not authorized anyone to provide any information or to make any representations other than those contained
in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only
the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Through and including ,
2012 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealers obligation
to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Persons who come
into possession of this prospectus and any applicable free writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this
prospectus and any such free writing prospectus applicable to that jurisdiction.

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider
in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes thereto and the information set forth under the
sections Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations, in each case included in this prospectus. Unless the context otherwise requires, we use the terms
Ruckus, company, we, us and our in this prospectus to refer to Ruckus Wireless, Inc. and, where appropriate, our consolidated subsidiaries.

Company Overview

Ruckus is
a leading provider of carrier-class Wi-Fi solutions. Our solutions, which we call Smart Wi-Fi, are used by service providers and enterprises to solve network capacity and coverage challenges associated with the rapidly increasing traffic and number
of users on wireless networks. Our Smart Wi-Fi solutions offer carrier-class enhanced reliability, consistent performance, extended range and massive scalability. Our products include gateways, controllers and access points. These products
incorporate our proprietary technologies, including Smart Radio, Smart QoS, Smart Mesh, SmartCell and Smart Scaling, to enable high performance in a variety of challenging operating conditions faced by service providers and enterprises.

We sell our products to service providers and enterprises globally and have sold our products to over 16,000 end-customers worldwide. We added over
4,400 new end-customers in the first half of 2012. We sell to enterprises through a worldwide network of more than 5,300 value-added resellers and distributors, which we refer to as our channel partners. Our enterprise end-customers are typically
mid-sized organizations in a variety of industries, including hospitality, education, healthcare, warehousing and logistics, corporate enterprise, retail, state and local government and public venues, such as stadiums, convention centers, airports
and major outdoor public areas. We also sell directly and indirectly to a range of service providers, including mobile operators, cable companies, wholesale operators and fixed-line carriers. We have over 45 service provider end-customers, including
Bright House Networks, The Cloud (a BSkyB Company), KDDI, Tikona Digital Networks, Time Warner Cable and Towerstream.

Our revenue
increased 98%, from $47.4 million for the first half of 2011 to $93.9 million for the first half of 2012. Our revenue increased from $44.4 million in 2009 to $75.5 million in 2010 and to $120.0 million in 2011, representing a compound annual growth
rate of 64%. Our performance improved from a net loss of $0.9 million for the first half of 2011 to net income of $24.4 million for the first half of 2012, which included $17.4 million of income related to the release of the valuation
allowance on our net deferred tax assets. Our performance improved from a net loss of $10.0 million in 2009 to a net loss of $4.4 million in 2010 and to a net income of $4.2 million in 2011.

Industry Background

The
increased adoption and use of mobile devices, such as smartphones, tablets and laptops, is causing significant growth in wireless traffic. Mobile users expect to be able to connect to wireless networks for work, personal communications and
entertainment from virtually anywhere and at anytime. As a result, mobile service providers and enterprises are struggling to address both the increased demands on their networks and the significant investment required to upgrade network capacity
and provide ubiquitous wireless connectivity.

These capacity and coverage challenges will continue to escalate as users increase their use of
mobile devices and access bandwidth-intensive and latency-sensitive applications, such as those for viewing streaming multimedia, video conferencing, downloading video content, viewing and sharing photos and interactive social media. The heaviest
demands tend to be clustered in high density metropolitan areas and public venues during peak usage hours when many users are trying to access the network at the same time. Service providers and enterprises need solutions that meet these capacity
and coverage demands.

According to Signals Research Group, mobile data traffic in the United States alone is expected to grow between
53x and 153x from 2010 to 2020. To meet this demand, mobile service providers are adding macro network capacity by increasing cell site density, investing in new cellular technology, such as long term evolution, or LTE and LTE Advanced, and
acquiring additional spectrum. However, Signals Research Group also projects that U.S. cellular network capacity will grow by only approximately 25x over the same time period. There will therefore be a significant gap between the expected traffic
volume and the expected capacity of conventional cellular infrastructure in the United States. While this capacity gap is significant in itself, it actually does not factor in capacity deficits outside the United States or the peak usage demands
that must be considered when designing and upgrading networks.

As a result of this capacity gap, mobile service providers must find new
ways to inject capacity into their wireless networks. The capacity gap is also opening up new business opportunities for other service providers, such as cable companies, wholesale operators and fixed-line carriers, to add reliable wireless access
services to their traditional access services.

Capacity challenges are also experienced by enterprises in a variety of industries,
including hospitality, education, healthcare, warehousing and logistics, corporate enterprise, retail, state and local government and public venues, such as stadiums, convention centers, airports and major outdoor public areas. In addition to
significant traffic growth, these enterprises experience widely fluctuating network load, both in number of users and amount of traffic, and are faced with a range of operating conditions. These enterprises also typically do not have sufficient IT
staff to cost-effectively address these issues. Enterprises thus need wireless solutions that are reliable and easy to manage.

Wi-Fi is
a conceptually attractive solution to increase capacity, improve wireless network performance, expand coverage footprint, deliver new services and better accommodate traffic growth. Mobile devices are increasingly equipped with Wi-Fi, and many
devices now rely on Wi-Fi as their primary Internet connection. Wi-Fi also operates over an unlicensed, widely available spectrum and functions well both indoors and outdoors. However, the ability of service providers and enterprises to deliver
robust and pervasive connectivity over Wi-Fi has been constrained by the limitations of what we refer to as basic, or conventional, Wi-Fi technology.

Wi-Fi standards and Wi-Fi network equipment were originally designed to allow simple, easy-to-use and low cost connectivity in the lower interference environment of the home. As a result, basic Wi-Fi products
suffer from a number of inadequacies for addressing todays wireless challenges. These include an inability to handle interference in crowded circumstances, degradation in performance under load, inconsistent coverage as users move around while
connected to the network and an inability to deliver rich content such as voice over IP, or VoIP, without choppy or interrupted transmission. In addition, basic Wi-Fi does not provide service providers needed integration with their existing
networks, adequate scalability for the hundreds of thousands of access points required and the extensible and flexible platform needed to offer new revenue-generating services and applications.

To address the increasing capacity and coverage challenges, service providers and enterprises
need a new class of Wi-Fi that offers enhanced reliability, consistent performance, extended range and massive scalability. We refer to this as carrier-class Wi-Fi. Carrier-class Wi-Fi combines the cost and ease of use benefits offered by basic
Wi-Fi technology with an advanced level of adaptability, performance and integration with existing networks that addresses the challenges faced by service providers and enterprises.

According to Infonetics Research, Inc., or Infonetics, the market for Wi-Fi solutions for carriers is expected to grow from $296 million in 2011 to
$2.8 billion in 2016, representing a 57% compound annual growth rate. According to Gartner, Inc., or Gartner, the market for Wi-Fi networking solutions for enterprises is expected to grow from $3.4 billion in 2011 to $6.9 billion in 2016,
representing a 15% compound annual growth rate. Carrier-class Wi-Fi addresses the needs of both of these markets.

Our Solution

Our carrier-class Smart Wi-Fi solutions enable service providers and enterprises to benefit from advanced levels of performance and
integration capabilities that are not possible with basic Wi-Fi. We offer a wide-range of Smart Wi-Fi products, including a number of advanced Wi-Fi controllers and gateways, a broad portfolio of indoor and outdoor access points and Wi-Fi
infrastructure management software. These products incorporate our proprietary technologies, including:

capability enables service providers to improve subscriber ease of use and enhance the revenue opportunity by incorporating Wi-Fi usage into their service offerings and subscriber data plans;



Flexible deployment, by being designed and sized for a range of site, application and management requirements, our solutions are suitable for different
types of service providers including mobile operators, cable companies, wholesale operators and fixed-line carriers;



Massive scalability, by being designed to accommodate the scalability requirements of service provider networks; and



Extensible platform architecture, by serving as platforms for incorporation of additional functions and technologies in the future to serve the evolving
needs of service providers.

Our Strategy

Our goal is to lead and expand the market for carrier-class Wi-Fi networking solutions. The key elements of our growth strategy are:



continue to innovate and extend our leadership role in providing Smart Wi-Fi solutions;



leverage products across service provider and enterprise markets;



expand our service provider-focused sales and support teams;



extend the reach and productivity of our network of enterprise-focused channel partners; and



increase the uses of Wi-Fi in service provider and enterprise networks.

Risk Factors Summary

Our
business is subject to numerous risks and uncertainties, including those highlighted in the section entitled Risk Factors immediately following this prospectus summary. These risks include, among others, the following:



If the market for our products does not develop as we expect, demand for our products may not grow as we expect;

The growth rate in recent periods of our revenue, net income and margin may not be indicative of our future performance;



Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense. As a result, our sales and revenue are difficult to
predict and may vary substantially from period to period, which may cause our operating results to fluctuate significantly;



Our large end-customers, particularly service providers, have substantial negotiating leverage, which may require that we agree to terms and conditions that
could result in decreased revenues and gross margins. The loss of a single large end-customer could adversely affect our business;



We compete in highly competitive markets, and competitive pressures from existing and new companies may harm our business, revenues, growth rates and market
share. Many of our

current or potential competitors have longer operating histories, greater brand recognition, larger customer bases and significantly greater resources than we do, and we may lack sufficient
financial or other resources to maintain or improve our competitive position;



We compete in rapidly evolving markets and depend upon the development of new products and enhancements to our existing products. If we fail to predict and
respond to emerging technological trends and our customers changing needs, we may not be able to remain competitive; and



We base our inventory purchasing decisions on our forecasts of customers demand, and if our forecasts are inaccurate, our operating results could be
materially harmed.

Our Corporate Information

We were incorporated in 2002 in Delaware as Sceos Technologies, Inc. and subsequently changed our name to Video54 Technologies, Inc. and then to
Ruckus Wireless, Inc. We effectively commenced operations on June 1, 2004, when a new board of directors was appointed and senior management was hired. Our headquarters are located at 350 West Java Drive, Sunnyvale, California 94089 and our
telephone number is (650) 265-4200. Our website address is www.ruckuswireless.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus.

Ruckus Wireless, the Ruckus logos and other trademarks or service marks of Ruckus Wireless, Inc. appearing in this prospectus are the
property of Ruckus Wireless, Inc. This prospectus contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do not intend our use or display of other companies trade names,
trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

We are an
emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of
the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by
non-affiliates exceeds $700 million as of the prior June 30th, or (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Option to purchase additional shares of common stock offered by us and the selling stockholders

shares

Use of proceeds

We expect the net proceeds to us from this offering to be approximately $ million, or $ million
if the underwriters exercise their option to purchase additional shares in full. The principal purposes of this offering are to create a public market for our common stock and thereby enable access to the public equity markets by our employees and
stockholders, obtain additional capital and increase our visibility in the marketplace. We intend to use the net proceeds from this offering for working capital and other general corporate purposes, including sales and marketing activities and
products development. We may also use a portion of the net proceeds to acquire complementary businesses, products or technologies. However, we do not have agreements or commitments for any specific acquisitions at this time.

We will not receive any of the proceeds from the sale of shares by the selling stockholders. See Use of Proceeds.

Risk factors

See the section titled Risk Factors beginning on page 11 and the other information included in this prospectus for a discussion of factors you should carefully consider before
deciding to invest in our common stock.

Proposed trading symbol

RKUS

The number of shares of our common stock to be outstanding after this offering is based on 66,529,655 shares of
common stock outstanding as of August 31, 2012, including 154,424 shares issued pursuant to early exercise of stock options that are subject to repurchase, and excludes, as of August 31, 2012, the following shares:



23,742,320 shares of our common stock issuable upon the exercise of options outstanding under our 2002 Stock Plan and our 2012 Equity Incentive Plan at a
weighted average exercise price of $2.40 per share;

You should read the summary consolidated financial data in conjunction with Use of Proceeds, Capitalization, Selected
Consolidated Financial Data, Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes, all included elsewhere in this prospectus.

We have derived the consolidated statements of operations data for the years ended December 31, 2010 and 2011 and the consolidated
balance sheet data as of December 31, 2010 and 2011 from our audited consolidated financial statements appearing elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2011 and 2012 and
consolidated balance sheet data as of June 30, 2012 have been derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. We have prepared the unaudited consolidated financial data on the same basis as the
audited consolidated financial statements. We have included, in our opinion, all adjustments, consisting only of normal recurring adjustments that we consider necessary for a fair presentation of the financial information set forth in those
statements. The consolidated statements of operations data for the year ended December 31, 2009, as well as the consolidated balance sheet data as of December 31, 2009, are derived from unaudited consolidated financial statements that are not
included in this prospectus. Our historical results are not necessarily indicative of the results that should be expected in the future, and our interim results are not necessarily indicative of the results that should be expected for the full year
or any other period. Amounts are in thousands, except per share data.

Pro forma basic and diluted net loss per common share have been
calculated assuming the conversion of all outstanding shares of preferred stock into 47,875,371 shares of common stock. See Note 11 to our consolidated financial statements for an explanation of the method used to determine the number of shares used
in computing historical and pro forma basic and diluted net loss per common share.

We adopted ASU 2009-13 and ASU 2009-14 at the beginning of 2010 on a prospective basis for applicable arrangements originating or materially modified after January 1,
2010. Revenues and net income for 2010 were higher by $2.8 million than they would have been prior to the adoption of ASU 2009-13 and ASU 2009-14.

Stock-based compensation expense included in the statements of operations data above was as follows:

Years Ended December 31,

Six MonthsEnded June 30,

2009

2010

2011

2011

2012

(in thousands)

(unaudited)

Cost of revenues

$

65

$

82

$

148

$

49

$

53

Research and development

327

468

1,055

332

757

Sales and marketing

149

242

471

148

558

General and administrative

250

421

594

250

1,510

Total stock-based compensation expense

$

791

$

1,213

$

2,268

$

779

$

2,878

As of June 30, 2012

Actual

ProForma(1)

ProFormaAsAdjusted(2)

(in thousands, except per

share data)

(unaudited)

Consolidated Balance Sheet Data:

Cash and cash equivalents

$

31,270

$

31,270

$

Working capital

26,508

26,508

Total assets

112,794

112,794

Deferred revenue, current and long-term

21,281

21,281

Redeemable convertible preferred stock

76,140



Total stockholders equity (deficit)

(17,227

)

58,913

(1)

The pro forma column reflects the automatic conversion of all outstanding shares of our preferred stock into 47,875,371 shares of our common stock immediately prior to the
closing of this offering.

(2)

The pro forma as adjusted balance sheet data reflects the items described in footnote (1) above, as well as the estimated net proceeds of
$ million from our sale of shares of common stock that we are offering at the initial public offering price of
$ per share, after deducting the underwriting fees and commissions and estimated offering expenses payable by us.

Investing in our common stock involves a high degree of risk. Before you invest in our common stock, you should carefully consider the following
risks, as well as general economic and business risks, and all of the other information contained in this prospectus. Any of the following risks could have a material adverse effect on our business, operating results and financial condition and
cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment. When determining whether to invest, you should also refer to the other information contained in this prospectus, including our
financial statements and the related notes thereto.

Risks Related to Our Business and Industry

If the market for our products does not develop as we expect, demand for our products may not grow as we expect.

We develop and provide Wi-Fi products for service providers and enterprises. The success of our business depends on the continued growth and
reliance on Wi-Fi in these markets. The recent growth of the market for Wi-Fi networks is being driven by the increased use of Wi-Fi-enabled mobile devices and the use of Wi-Fi as a preferred connectivity option to support video, voice and other
higher-bandwidth uses.

A number of barriers may prevent service providers or their subscribers from adopting Wi-Fi technology to
address the capacity gap in wireless networks. For example, Wi-Fi operates over an unlicensed radio spectrum, and if the Wi-Fi spectrum becomes crowded, Wi-Fi solutions will be a less attractive option for service providers. In addition, in order
for Wi-Fi solutions to adequately address the potential future capacity gap between cellular capacity and demand, mobile devices should automatically switch from a cellular data network to the service providers Wi-Fi network, when available
and appropriate. Generally, mobile devices do not switch to unauthenticated Wi-Fi networks without input from the device user, and often require the user to log in when a new Wi-Fi network is accessed, which may tend to limit a subscribers use
of Wi-Fi. These and other factors could limit or slow the adoption of Wi-Fi technologies by service providers as a means to address this potential future capacity gap.

There is no guarantee that service providers and enterprises will continue to utilize Wi-Fi technology, that use of Wi-Fi-enabled mobile devices will continue to increase or that Wi-Fi will continue to be the
preferred connectivity option for the uses described above. There is also no guarantee that service providers and enterprises will understand the benefits we believe that our Smart Wi-Fi solutions provide. If another technology were found to be
superior to Wi-Fi by service providers and enterprises, it would have a material adverse effect on our business, operating results and financial condition. As a result, demand for our products may not continue to develop as we anticipate, or at all.

Our quarterly and annual operating results have fluctuated in the past and
may fluctuate significantly in the future, which makes it difficult for us to predict our future operating results. The timing and size of sales of our products are highly variable and difficult to predict and can result in significant fluctuations
in our net revenue from period to period. This is particularly true of our sales to service providers, whose purchases are generally larger than those of our enterprise customers, causing greater variation in our results based on when service
providers take delivery of our products.

In addition, our budgeted expense levels depend in part on our expectations of future revenue. Because any substantial adjustment to expenses to account for lower levels of revenue is difficult
and takes time, we may not be able to reduce our costs sufficiently to compensate for an unexpected shortfall in net revenue, and even a small shortfall in net revenue could disproportionately and adversely affect our operating margin and operating
results for a given quarter.

Our operating results may also fluctuate due to a variety of other factors, many of which are outside of
our control, including the changing and volatile U.S., European and global economic environments, and any of which may cause our stock price to fluctuate. In addition to other risks listed in this Risk Factors section, factors that may
affect our operating results include:



fluctuations in demand for our products and services, including seasonal variations in certain enterprise sectors such as hospitality and education, where
end-customers place orders most heavily in the second and third quarters;



the inherent complexity, length and associated unpredictability of our sales cycles for our products and services, particularly with respect to sales to service
providers;



changes in customers budgets for technology purchases and delays in their purchasing cycles;



technical challenges in service providers overall networks, unrelated to our products, which could delay adoption and installation of our products;



changing market conditions, including current and potential service provider consolidation;



any significant changes in the competitive dynamics of our markets, including new entrants, or further consolidation;

the timing of product releases or upgrades by us or by our competitors;



our ability to develop, introduce and ship in a timely manner new products and product enhancements and anticipate future market demands that meet our
customers requirements;



our ability to successfully expand the suite of products we sell to existing customers;



the potential need to record incremental inventory reserves for products that may become obsolete due to our new product introductions;



our ability to control costs, including our operating expenses and the costs of the components we purchase;



any decision to increase or decrease operating expenses in response to changes in the marketplace or perceived marketplace opportunities;



growth in our headcount and other related costs incurred in our customer support organization;



volatility in our stock price, which may lead to higher stock compensation expenses;



our ability to derive benefits from our investments in sales, marketing, engineering or other activities; and



general economic or political conditions in our domestic and international markets, in particular the restricted credit environment impacting the credit of our
customers.

The cumulative effects of these factors could result in large fluctuations and unpredictability in our
quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication

of our future performance. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our
revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our
common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated revenue and/or earnings forecasts we may provide.

The growth rate in recent periods of our revenue, net income and margin may not be indicative of our future performance.

You should not consider the growth rate in our revenue, net income or margin in recent periods as indicative of our future performance. We do not expect to achieve similar revenue, net income or margin growth rates
in future periods. You should not rely on our revenue, net income or margin for any prior quarterly or annual periods as any indication of our future revenue, net income or margin, or their rate of growth. If we are unable to maintain consistent
revenue, net income or margin, or growth of any of these financial measures, our stock price could be volatile, and it may be difficult to maintain profitability.

Our sales cycles can be long and unpredictable, particularly to service providers, and our sales efforts require considerable time and expense. As a result, our sales and revenue are difficult to predict and
may vary substantially from period to period, which may cause our operating results to fluctuate significantly.

The timing of
our revenues is difficult to predict. Our sales efforts involve educating our potential end-customers and channel partners about the applications and benefits of our products, including the technical capabilities of our products. Service providers
typically require long sales cycles, which generally range between one and three years, but can be longer. The sale to a large service provider usually begins with an evaluation, followed by one or more network trials, followed by vendor selection
and contract negotiation and finally followed by installation, testing and deployment. Sales cycles for enterprises are typically less than 90 days. We spend substantial time and resources on our sales efforts without any assurance that our efforts
will produce any sales. In addition, purchases of our products are frequently subject to budget constraints, multiple approvals, and unplanned administrative, processing and other delays. Moreover, the evolving nature of the market may lead
prospective end-customers to postpone their purchasing decisions pending resolution of Wi-Fi or other standards or adoption of technology by others. Even if an end-customer makes a decision to purchase our products, there may be circumstances or
terms relating to the purchase that delay our ability to recognize revenue from that purchase, which makes our revenue difficult to forecast. As a result, it is difficult to predict whether a sale will be completed, the particular fiscal period in
which a sale will be completed or the fiscal period in which revenue from a sale will be recognized. Our operating results may therefore vary significantly from quarter to quarter.

With respect to service providers, we have only a short history of making sales, and there remains uncertainty as to whether a significant service
provider market for our products will develop. Sales to service providers have been characterized by large and sporadic purchases, in addition to long sales cycles. Sales activity to service providers depends upon the stage of completion of
expanding network infrastructures, the availability of funding, and the extent to which service providers are affected by regulatory, economic and business conditions in their country of operations. The nature of this sales activity to service
providers can result in further fluctuations in our operating results from period to period. Orders from service providers could decline for many reasons unrelated to the competitiveness of our products and services within their respective markets,
such as advances in competing technologies. Our service provider end-customers typically have long implementation

cycles, require a broader range of services, and often require acceptance terms that can lead to a delay in revenue recognition. Some of our current or prospective service provider end-customers
have cancelled or delayed and may in the future cancel or delay spending on the development or roll-out of capital and technology projects with us due to continuing economic uncertainty and, consequently, our financial position, results of
operations or cash flows may be adversely affected. Weakness in orders from service providers, including as a result of any slowdown in capital expenditures by service providers, which may be more prevalent during a global economic downturn or
periods of economic uncertainty, could have a material adverse effect on our business, financial position, results of operations, cash flows and stock price.

Our large end-customers, particularly service providers, have substantial negotiating leverage, which may require that we agree to terms and conditions that could result in decreased revenues and gross
margins. The loss of a single large end-customer could adversely affect our business.

Many of our end-customers are service
providers or larger enterprises that have substantial purchasing power and leverage in negotiating contractual arrangements with us. These end-customers may require us to develop additional product features, may require penalties for non-performance
of certain obligations, such as delivery, outages or response time, and may have multi-vendor strategies. The leverage held by these large end-customers could result in decreases in our revenues and gross margins. The loss of a single large
end-customer could materially harm our business and operating results.

We compete in highly competitive markets, and competitive pressures from
existing and new companies may harm our business, revenues, growth rates and market share. In addition, many of our current or potential competitors have longer operating histories, greater brand recognition, larger customer bases and significantly
greater resources than we do, and we may lack sufficient financial or other resources to maintain or improve our competitive position.

The markets in which we compete are intensely competitive, and we expect competition to increase in the future from established competitors and new market entrants. The markets are influenced by, among others, the
following competitive factors:

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brand awareness and reputation;

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price and total cost of ownership;

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strength and scale of sales and marketing efforts, professional services and customer support;

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product features, reliability and performance;

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incumbency of current provider, either for Wi-Fi products or other products;

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scalability of products;

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ability to integrate with other technology infrastructures; and

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breadth of product offerings.

Our competitors include Cisco Systems, Ericsson, Hewlett-Packard, Motorola and Aruba Networks. We expect competition to intensify in the future as
other companies introduce new products into our markets. This competition could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses and failure to increase, or the loss of, market share, any of which
would likely seriously harm our business, operating results or financial condition. If we do not keep pace with product and technology advances, there could be a material and adverse effect on our competitive position, revenues and prospects for
growth.

A number of our current or potential competitors such as Cisco Systems, Ericsson, Hewlett-Packard and
Motorola, have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing and other resources than we do. Our competitors may be able to anticipate, influence or adapt
more quickly to new or emerging technologies and changes in customer requirements, devote greater resources to the promotion and sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisitions
or other opportunities more readily and develop and expand their product and service offerings more quickly than we can. In addition, certain of our competitors may be able to leverage their relationships with customers based on other products or
incorporate functionality into existing products to gain business in a manner that discourages customers from purchasing our products, including through selling at zero or negative margins, product bundling or closed technology platforms. Potential
end-customers may prefer to purchase all of their equipment from a single provider, or may prefer to purchase wireless networking products from an existing supplier rather than a new supplier, regardless of product performance or features.

We expect increased competition from our current competitors, as well as other established and emerging companies, to the extent our
markets continue to develop and expand. Conditions in our markets could change rapidly and significantly as a result of technological advancements or other factors. Some of our competitors have made acquisitions or entered into partnerships or other
strategic relationships to offer a more comprehensive solution than they individually had offered. We expect this trend to continue as companies attempt to strengthen or maintain their market positions in an evolving industry and as companies enter
into partnerships or are acquired. The companies resulting from these possible consolidations may create more compelling product offerings and be able to offer greater pricing flexibility, making it more difficult for us to compete effectively,
including on the basis of price, sales and marketing programs, technology or product functionality. Continued industry consolidation may adversely impact customers perceptions of the viability of smaller and even medium-sized technology
companies such as us and, consequently, customers willingness to purchase from such companies. These pressures could materially adversely affect our business, operating results and financial condition.

We compete in rapidly evolving markets and depend upon the development of new products and enhancements to our existing products. If we fail to predict and
respond to emerging technological trends and our customers changing needs, we may not be able to remain competitive.

The
Wi-Fi and wireless networking market is generally characterized by rapidly changing technology, changing end-customer needs, evolving industry standards and frequent introductions of new products and services. To succeed, we must effectively
anticipate, and adapt in a timely manner to, end-customer requirements and continue to develop or acquire new products and features that meet market demands, technology trends and regulatory requirements. Likewise, if our competitors introduce new
products and services that compete with ours, we may be required to reposition our product and service offerings or introduce new products and services in response to such competitive pressure. If we fail to develop new products or product
enhancements, or our end-customers or potential end-customers do not perceive our products to have compelling technical advantages, our business could be adversely affected, particularly if our competitors are able to introduce solutions with such
increased functionality. Developing our products is expensive, complex and involves uncertainties. Each phase in the development of our products presents serious risks of failure, rework or delay, any one of which could impact the timing and
cost-effective development of such product and could jeopardize end-customer acceptance of the product. We have experienced in the past and may in the future experience design, manufacturing, marketing and other difficulties that could delay or
prevent the development, introduction or marketing of new products and enhancements. In addition, the introduction of new or enhanced products requires that we carefully manage the transition from

older products to minimize disruption in customer ordering practices and ensure that new products can be timely delivered to meet our customers demand. As a result, we may not be successful
in modifying our current products or introducing new products in a timely or appropriately responsive manner, or at all. If we fail to address these changes successfully, our business and operating results could be materially harmed.

We base our inventory purchasing decisions on our forecasts of customers demand, and if our forecasts are inaccurate, our operating results could be
materially harmed.

We place orders with our manufacturers based on our forecasts of our customers demand. Our forecasts
are based on multiple assumptions, each of which may cause our estimates to be inaccurate, affecting our ability to provide products to our customers. When demand for our products increases significantly, we may not be able to meet demand on a
timely basis, and we may need to expend a significant amount of time working with our customers to allocate limited supply and maintain positive customer relations, or we may incur additional costs in order to rush the manufacture and delivery of
additional products. If we underestimate customers demand, we may forego revenue opportunities, lose market share and damage our customer relationships. Conversely, if we overestimate customer demand, we may purchase more inventory than we are
able to sell at any given time or at all. In addition, we grant our distributors stock rotation rights, which require us to accept stock back from a distributors inventory, including obsolete inventory. As a result of our failure to estimate
demand for our products, and our distributors stock rotation rights, we could have excess or obsolete inventory, resulting in a decline in the value of our inventory, which would increase our costs of revenues and reduce our liquidity. Our
failure to accurately manage inventory relative to demand would adversely affect our operating results.

If we are unable to manage our growth and
expand our operations successfully, our business and operating results will be harmed and our reputation may be damaged.

We have
expanded our operations significantly since inception and anticipate that further significant expansion will be required to achieve our business objectives. The growth and expansion of our business and product offerings places a continuous and
significant strain on our management, operational and financial resources. Any such future growth would also add complexity to and require effective coordination throughout our organization.

To manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our
operating and administrative systems and controls, and our ability to manage headcount, capital and processes in an efficient manner. We may not be able to successfully implement improvements to these systems and processes in a timely or efficient
manner, which could result in additional operating inefficiencies and could cause our costs to increase more than planned. If we do increase our operating expenses in anticipation of the growth of our business and this growth does not meet our
expectations, our operating results may be negatively impacted. If we are unable to manage future expansion, our ability to provide high quality products and services could be harmed, which could damage our reputation and brand and may have a
material adverse effect on our business, operating results and financial condition.

Our independent registered public accountants have identified a material weakness and several significant
deficiencies in our internal control over financial reporting. If we are unable to remediate the material weaknesses and significant deficiencies, or other control deficiencies are identified, we may not be able to report our financial results
accurately, prevent fraud or file our periodic reports as a public company in a timely manner. In addition, because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public
accountants as to our internal control over financial reporting for the foreseeable future.

In connection with the
contemporaneous audit of our consolidated financial statements for the years ended December 31, 2011 and 2010, our independent registered public accountants identified a material weakness and several significant deficiencies in our internal
control over financial reporting. The material weakness resulted in the need for adjustments to our financial statements during the audit. A material weakness is a deficiency, or a combination of deficiencies, in internal control over
financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or
a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting, including the audit
committee of the board of directors.

The material weakness related to a failure to properly design our financial closing and reporting
process, which resulted from insufficient accounting resources throughout the years being audited to analyze, record, review and monitor compliance with generally accepted accounting principles for transactions on a timely basis. The resulting
errors primarily related to improper estimation of best estimated selling price and vendor specific objective evidence as required properly to recognize revenue and to the capitalization of overhead in inventory.

The significant deficiencies related to our lack of a formal fraud risk assessment process, our inadequate design of the financial closing and
reporting process that resulted from a lack of documentation of our accounting policies and procedures and our lack of segregation of duties so that all journal entries and account reconciliations are reviewed by someone other than the preparer.

We have taken steps to remediate the material weakness and these significant deficiencies, and to further strengthen our accounting
staff and internal controls, as follows:

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hired additional accounting personnel, including a corporate controller in February 2012, an accounting supervisor in April 2012, a tax director in July 2012, a
manager of revenue and reporting and a stock plan administrator in August 2012, two other accountants in the corporate accounting function in March 2012 and May 2012, and accounting consultants to assist us in April 2012; and

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are maintaining sufficient accounting personnel so that journal entries and account reconciliations are reviewed by someone other than the preparer.

We plan to take additional steps to remediate the material weakness and significant deficiencies and improve our
accounting function, including:

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adopting formal processes and documentation for fraud risk assessment; and

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implementing SAP By Design, a more robust enterprise resource planning, or ERP, system than the one we presently use, in the first quarter of 2013.

We cannot be certain that these measures will successfully remediate the material weakness and
significant deficiencies or that other material weaknesses and control deficiencies will not be discovered in the future. If our efforts are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to
report our financial results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated and result in the loss of investor confidence or delisting and cause the market price of our
common stock to decline.

When we become a public company following this initial public offering, we will be required to furnish a
report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the effective date of this offering. Whether or not our management concludes that our internal
control over financial reporting is effective, our independent registered public accounting firm may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or
reviewed. However, our independent registered public accounting firm will not be required to attest formally to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later
of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging growth company as defined in the JOBS Act. Accordingly, you will not be able to depend on any attestation concerning
our internal control over financial reporting from our independent registered public accountants for the foreseeable future.

Failure to
successfully implement our new enterprise resource planning system could impact our ability to operate our business, lead to internal control and reporting weaknesses and adversely affect our results of operations and financial condition.

We are in the process of implementing a new ERP information management system to provide for greater depth and breadth of
functionality and effectively manage our business data, communications, supply chain, order entry and fulfillment, inventory and warehouse management and other business processes. A delay in such implementation, problems with transitioning to our
upgraded ERP system or a failure of our new system to perform as we anticipate may result in transaction errors, processing inefficiencies and the loss of sales, may otherwise disrupt our operations and materially and adversely affect our business,
results of operations and financial condition and may harm our ability to accurately forecast sales demand, manage our supply chain, fulfill customer orders and report financial and management information on a timely and accurate basis. In addition,
due to the internal control features embedded within ERP systems, we may experience difficulties that may affect our internal control over financial reporting, which may create a significant deficiency or material weakness in our overall internal
controls. We expect the initial implementation launch date for our new ERP system to be in the first quarter of 2013. We will stop using our current ERP system immediately when we launch our new ERP system, so we will not have an immediate backup
system if our new ERP system fails to perform as we anticipate. The risks associated with implementation of our new ERP system will be greater for us as a newly public company with public reporting obligations.

We have a limited operating history, which makes it difficult to evaluate our prospects and future financial results and may increase the risk that we will
not be successful.

We were incorporated in August 2002, began commercial shipments of our products and systems in 2005 and only
achieved significant levels of revenue in 2010. As a result of our limited operating history, it is very difficult to forecast our future operating results. Our prospects should be considered and evaluated in light of the risks and uncertainties
frequently encountered by companies with limited operating histories. These risks and difficulties include challenges in accurate financial planning as a result of limited historical data and the uncertainties resulting from having had a relatively
limited time period in which to implement and evaluate our business strategies as compared to older companies with longer operating histories.

Some of the components and technologies used in our products are purchased from a single source or a limited
number of sources. The loss of any of these suppliers may cause us to incur additional transition costs, result in delays in the manufacturing and delivery of our products, or cause us to carry excess or obsolete inventory and could cause us to
redesign our products.

Although supplies of our components are generally available from a variety of sources, we currently
depend on a single source or limited number of sources for several components for our products. We have also entered into license agreements with some of our suppliers for technologies that are used in our products, and the termination of these
licenses, which can generally be done on relatively short notice, could have a material adverse effect on our business. For example, we purchase standard Wi-Fi chipsets only from Qualcomm Atheros and our products incorporate certain technology that
we license from Qualcomm Atheros. If that license agreement were terminated, we would be required to redesign some of our products in order to incorporate technology from alternative sources, and any such termination of the license agreement and
redesign of certain of our products could require additional licenses and materially and adversely affect our business and operating results.

Because there are no other sources identical to several of our components and technologies, if we lost any of these suppliers or licenses, we could be required to transition to a new supplier or licensor, which
could increase our costs, result in delays in the manufacturing and delivery of our products or cause us to carry excess or obsolete inventory. Additionally, poor quality in any of the sole-sourced components in our products could result in lost
sales or lost sales opportunities. If the quality of the components does not meet our or our customers requirements, if we are unable to obtain components from our existing suppliers on commercially reasonable terms, or if any of our sole
source providers cease to remain in business or continue to manufacture such components, we could be required to redesign our products in order to incorporate components or technologies from alternative sources. The resulting stoppage or delay in
selling our products and the expense of redesigning our products could result in lost sales opportunities and damage to customer relationships, which would adversely affect our reputation, business and operating results.

In addition, for certain components for which there are multiple sources, we are subject to potential price increases and limited availability due
to market demand for such components. In the past, unexpected demand for communication products caused worldwide shortages of certain electronic parts. If such shortages occur in the future and we are unable to pass component price increases along
to our customers or maintain stable or competitive pricing, our gross margins and operating results could be negatively impacted.

Because we rely
on third parties to manufacture our products, our ability to supply products to our customers may be disrupted.

We outsource the
manufacturing of our products to third-party manufacturers. Our reliance on these third-party manufacturers reduces our control over the manufacturing process and exposes us to risks, including reduced control over quality assurance, product costs,
and product supply and timing. Any manufacturing disruption by these third-party manufacturers could severely impair our ability to fulfill orders. Our reliance on outsourced manufacturers also yields the potential for infringement or
misappropriation of our intellectual property. If we are unable to manage our relationships with these third-party manufacturers effectively, or if these third-party manufacturers suffer delays or disruptions for any reason, experience increased
manufacturing lead-times, capacity constraints or quality control problems in their manufacturing operations, or fail to meet our future requirements for timely delivery, our ability to ship products to our customers would be severely impaired, and
our business and operating results would be seriously harmed.

These manufacturers typically fulfill our supply requirements on the basis of individual orders. We
do not have long term contracts with our third-party manufacturers that guarantee capacity, the continuation of particular pricing terms or the extension of credit limits. Accordingly, our third-party manufacturers are not obligated to continue to
fulfill our supply requirements, which could result in supply shortages, and the prices we are charged for manufacturing services could be increased on short notice. In addition, as a result of current global financial market conditions, natural
disasters or other causes, it is possible that any of our manufacturers could experience interruptions in production, cease operations or alter our current arrangements. If our manufacturers are unable or unwilling to continue manufacturing our
products in required volumes, we will be required to identify one or more acceptable alternative manufacturers. It is time-consuming and costly and could be impractical to begin to use new manufacturers, and changes in our third-party manufacturers
may cause significant interruptions in supply if the new manufacturers have difficulty manufacturing products to our specification. As a result, our ability to meet our scheduled product deliveries to our customers could be adversely affected, which
could cause the loss of sales to existing or potential customers, delayed revenue or an increase in our costs. Any production interruptions for any reason, such as a natural disaster, epidemic, capacity shortages or quality problems, at one of our
manufacturers would negatively affect sales of our product lines manufactured by that manufacturer and adversely affect our business and operating results.

We rely significantly on channel partners to sell and support our products, and the failure of this channel to be effective could materially reduce our revenue.

The majority of our sales are through channel partners. We believe that establishing and maintaining successful relationships with these channel
partners is, and will continue to be, important to our financial success. Recruiting and retaining qualified channel partners and training them in our technology and product offerings require significant time and resources. To develop and expand our
channel, we must continue to scale and improve our processes and procedures that support our channel partners, including investment in systems and training.

Existing and future channel partners will only work with us if we are able to provide them with competitive products on terms that are commercially reasonable to them. If we fail to maintain the quality of our
products or to update and enhance them, existing and future channel partners may elect to work instead with one or more of our competitors. In addition, the terms of our arrangements with our channel partners must be commercially reasonable for both
parties. If we are unable to reach agreements that are beneficial to both parties, then our channel partner relationships will not succeed.

We have no minimum purchase commitments with any of our channel partners, and our contracts with channel partners do not prohibit them from offering products or services that compete with ours, including products
they currently offer or may develop in the future and incorporate into their own systems. Some of our competitors may have stronger relationships with our channel partners than we do and we have limited control, if any, as to whether those partners
use our products, rather than our competitors products, or whether they devote resources to market and support our competitors products, rather than our offerings.

The reduction in or loss of sales by these channel partners could materially reduce our revenue. If we fail to maintain relationships with our channel partners, fail to develop new relationships with other channel
partners in new markets, fail to manage, train or incentivize existing channel partners effectively, fail to provide channel partners with competitive products on terms acceptable to them, or if these channel partners are not successful in their
sales efforts, our revenue may decrease and our operating results could suffer.

Our ability to sell our products is highly dependent on the quality of our support and services offerings, and
our failure to offer high quality support and services would have a material adverse effect on our sales and results of operations.

Once our products are deployed, our channel partners and end-customers depend on our support organization to resolve any issues relating to our products. A high level of support is important for the successful
marketing and sale of our products. In many cases, our channel partners provide support directly to our end-customers. We do not have complete control over the level or quality of support provided by our channel partners. These channel partners may
also provide support for other third-party products, which may potentially distract resources from support for our products. If we and our channel partners do not effectively assist our end-customers in deploying our products, succeed in helping our
end-customers quickly resolve post-deployment issues or provide effective ongoing support, it would adversely affect our ability to sell our products to existing end-customers and could harm our reputation with potential end-customers. In some
cases, we guarantee a certain level of performance to our channel partners and end-customers, which could prove to be resource-intensive and expensive for us to fulfill if unforeseen technical problems were to arise.

Many of our service provider and large enterprise customers have more complex networks and require higher levels of support than our smaller
end-customers. We have recently expanded our support organization for service provider and large enterprise end-customers, and continue to develop this organization. If we fail to build this organization quickly enough, or it fails to meet the
requirements of our service provider or large enterprise end-customers, it may be more difficult to execute on our strategy to increase our sales to large end-customers. In addition, given the extent of our international operations, our support
organization faces challenges, including those associated with delivering support, training and documentation in languages other than English. As a result of all of these factors, our failure to maintain high quality support and services would have
a material adverse effect on our business, operating results and financial condition.

The loss of key personnel or an inability to attract,
retain and motivate qualified personnel may impair our ability to expand our business.

Our success is substantially dependent
upon the continued service and performance of our senior management team and key technical, marketing and production personnel, including Selina Lo, who is our President and Chief Executive Officer, William Kish, who is one of our co-founders and
our Chief Technology Officer, and Victor Shtrom, who is our other co-founder and Chief Wireless Architect. Our employees, including our senior management team, are at-will employees, and therefore may terminate employment with us at any time with no
advance notice. The replacement of any members of our senior management team or other key personnel likely would involve significant time and costs and may significantly delay or prevent the achievement of our business objectives.

Our future success also depends, in part, on our ability to continue to attract, integrate and retain highly skilled personnel. Competition for
highly skilled personnel is frequently intense, especially in the San Francisco Bay Area, where we have a substantial presence and need for highly skilled personnel. Volatility or lack of performance in our stock price may also affect our ability to
attract and retain our key employees. Many of our employees have become, or will soon become, vested in a substantial amount of stock or stock options. Our employees may be more likely to leave us if the shares they own or the shares underlying
their vested options have significantly appreciated in value relative to the original purchase prices of the shares or the exercise prices of the options, or if the exercise prices of the options that they hold are significantly above the market
price of our common stock. Further, our employees ability to exercise those options and sell their stock in a public market after the closing of this offering is likely to result in a higher than normal turnover rate. Any failure to
successfully attract, integrate or retain qualified personnel to fulfill our current or future needs may negatively impact our

growth. Also, to the extent we hire personnel from our competitors, we may be subject to allegations that these new hires have been improperly solicited, or that they have divulged proprietary or
other confidential information, or that their former employers own their inventions or other work product.

Our products incorporate complex
technology and may contain defects or errors. We may become subject to warranty claims, product returns, product liability and product recalls as a result, any of which could cause harm to our reputation and adversely affect our business.

Our products incorporate complex technology and must operate with cellular networks and a significant number and range of mobile
devices using Wi-Fi, while supporting new and complex applications in a variety of environments that utilize different Wi-Fi communication industry standards. Our products have contained, and may contain in the future, undetected defects or errors.
Some errors in our products have been and may in the future only be discovered after a product has been installed and used by end-customers. These issues are most prevalent when new products are introduced into the market. Defects or errors have
delayed and may in the future delay the introduction of our new products. Since our products contain components that we purchase from third parties, we also expect our products to contain latent defects and errors from time to time related to those
third-party components.

Additionally, defects and errors may cause our products to be vulnerable to security attacks, cause them to
fail to help secure networks or temporarily interrupt end-customers networking traffic. Because the techniques used by computer hackers to access or sabotage networks are becoming increasingly sophisticated, change frequently and generally are
not recognized until launched against a target, our products and third-party security products may be unable to anticipate these techniques and provide a solution in time to protect our end-customers networks. In addition, defects or errors in
the mechanism by which we provide software updates for our products could result in an inability to update end-customers hardware products and thereby leave our end-customers vulnerable to attacks.

Real or perceived defects or errors in our products could result in claims by channel partners and end-customers for losses that they sustain,
including potentially losses resulting from security breaches of our end-customers networks and/or downtime of those networks. If channel partners or end-customers make these types of claims, we may be required, or may choose, for customer
relations or other reasons, to expend additional resources in order to help correct the problem, including warranty and repair costs, process management costs and costs associated with remanufacturing our inventory. Liability provisions in our
standard terms and conditions of sale may not be enforceable under some circumstances or may not fully or effectively protect us from claims and related liabilities and costs. In addition, regardless of the party at fault, errors of these kinds
divert the attention of our engineering personnel from our product development efforts, damage our reputation and the reputation of our products, cause significant customer relations problems and can result in product liability claims. We maintain
insurance to protect against certain types of claims associated with the use of our products, but our insurance coverage may not adequately cover any such claims. In addition, even claims that ultimately are unsuccessful could result in expenditures
of funds in connection with litigation and divert managements time and other resources. We also may incur costs and expenses relating to a recall of one or more of our products. The process of identifying recalled products that have been
widely distributed may be lengthy and require significant resources, and we may incur significant replacement costs, contract damage claims from our customers and significant harm to our reputation. The occurrence of these problems could result in
the delay or loss of market acceptance of our products and could adversely impact our business, operating results and financial condition.

If our
products do not interoperate with cellular networks and mobile devices, future sales of our products could be negatively affected.

Our products are designed to interoperate with cellular networks and mobile devices using Wi-Fi technology. These networks and devices have varied
and complex specifications. As a result, we must

attempt to ensure that our products interoperate effectively with these existing and planned networks and devices. To meet these requirements, we have and must continue to undertake development
and testing efforts that require significant capital and employee resources. We may not accomplish these development efforts quickly or cost-effectively, or at all. If our products do not interoperate effectively, orders for our products could be
delayed or cancelled, which would harm our revenue, gross margins and our reputation, potentially resulting in the loss of existing and potential end-customers. The failure of our products to interoperate effectively with cellular networks or mobile
devices may result in significant warranty, support and repair costs, divert the attention of our engineering personnel from our product development efforts and cause significant customer relations problems. In addition, our end-customers may
require our products to comply with new and rapidly evolving security or other certifications and standards. If our products are late in achieving or fail to achieve compliance with these certifications and standards, or our competitors achieve
compliance with these certifications and standards, such end-customers may not purchase our products, which would harm our business, operating results and financial condition.

Although certain technical problems experienced by users may not be caused by our products, our business and reputation may be harmed if users perceive our solution as the cause of a slow or unreliable
network connection, or a high profile network failure.

Our products have been deployed in many different locations and user
environments and are capable of providing connectivity to many different types of Wi-Fi-enabled devices operating a variety of applications. The ability of our products to operate effectively can be negatively impacted by many different elements
unrelated to our products. For example, a users experience may suffer from an incorrect setting in a Wi-Fi device. Although certain technical problems experienced by users may not be caused by our products, users often may perceive the
underlying cause to be a result of poor performance of the wireless network. This perception, even if incorrect, could harm our business and reputation. Similarly, a high profile network failure may be caused by improper operation of the network or
failure of a network component that we did not supply, but other service providers may perceive that our products were implicated, which, even if incorrect, could harm our business, operating results and financial condition.

Our corporate culture has contributed to our success, and if we cannot maintain this culture, especially as we grow, we could lose the innovation,
creativity, and teamwork fostered by our culture, and our business may be harmed.

We believe that a critical contributor to our
success has been our corporate culture, which we believe fosters innovation, teamwork, passion for customers, and focus on execution, as well as facilitating critical knowledge transfer and knowledge sharing. As we grow and change, we may find it
difficult to maintain these important aspects of our corporate culture, which could limit our ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability to retain and recruit personnel,
continue to perform at current levels or execute on our business strategy.

Our business, operating results and growth rates may be adversely
affected by current or future unfavorable economic and market conditions.

Our business depends on the overall demand for
wireless network technology and on the economic health and general willingness of our current and prospective end-customers to make those capital commitments necessary to purchase our products. If the conditions in the U.S. and global economies
remain uncertain or continue to be volatile, or if they deteriorate further, our business, operating results and financial condition may be materially adversely affected. Economic weakness, end-customer financial difficulties, limited availability
of credit and constrained capital spending have

resulted, and may in the future result, in challenging and delayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively impact our ability to
forecast future periods, which could result in an inability to satisfy demand for our products and a loss of market share.

In
particular, we cannot be assured of the level of spending on wireless network technology, the deterioration of which would have a material adverse effect on our results of operations and growth rates. The purchase of our products or willingness to
replace existing infrastructure is discretionary and highly dependent on a perception of continued rapid growth in consumer usage of mobile devices and in many cases involves a significant commitment of capital and other resources. Therefore, weak
economic conditions or a reduction in capital spending would likely adversely impact our business, operating results and financial condition. A reduction in spending on wireless network technology could occur or persist even if economic conditions
improve.

In addition, if interest rates rise or foreign exchange rates weaken for our international customers, overall demand for our
products and services could decline and related capital spending may be reduced. Furthermore, any increase in worldwide commodity prices may result in higher component prices for us and increased shipping costs, both of which may negatively impact
our financial results.

Our reported financial results may be adversely affected by changes in accounting principles applicable to us.

Generally accepted accounting principles in the United States, or U.S. GAAP, are subject to interpretation by the Financial
Accounting Standards Board, or FASB, the SEC and other various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial
results, and could affect the reporting of transactions completed before the announcement of any such change. Any difficulties in the implementation of these pronouncements could cause us to fail to meet our financial reporting obligations, which
could result in regulatory discipline.

In addition, the SEC has announced a multi-year plan that could ultimately lead to the use of
International Financial Reporting Standards by U.S. issuers in their SEC filings. Any such change could have a significant effect on our reported financial results.

If our estimates relating to our critical accounting policies are based on assumptions or judgments that change or prove to be incorrect, our operating results could fall below expectations of financial
analysts and investors, resulting in a decline in our stock price.

The preparation of financial statements in conformity with
U.S. GAAP requires our management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that
we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources. Our
operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of financial analysts and investors,
resulting in a decline in our stock price. Significant assumptions and estimates used in preparing our financial statements include those related to revenue recognition, inventory, product warranties, allowance for doubtful accounts, stock-based
compensation expense and income taxes.

Our exposure to the credit risks of our customers may make it difficult to collect accounts receivable and
could adversely affect our operating results and financial condition.

In the course of our sales to customers, we may encounter
difficulty collecting accounts receivable and could be exposed to risks associated with uncollectible accounts receivable. Economic

conditions may impact some of our customers ability to pay their accounts payable. While we attempt to monitor these situations carefully and attempt to take appropriate measures to collect
accounts receivable balances, we have written down accounts receivable and written off doubtful accounts in prior periods and may be unable to avoid accounts receivable write-downs or write-offs of doubtful accounts in the future. Such write-downs
or write-offs could negatively affect our operating results for the period in which they occur.

U.S. and global political, credit and financial
market conditions may negatively impact or impair the value of our current portfolio of cash and cash equivalents, including U.S. Treasury securities and U.S.-backed investment vehicles.

Our cash and cash equivalents are held in a variety of interest bearing instruments, primarily in U.S. Treasury securities. As a result of the
uncertain domestic and global political, credit and financial market conditions, investments in these types of financial instruments pose risks arising from liquidity and credit concerns. Given that future deterioration in the U.S. and global credit
and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our cash, cash equivalents or possible investments will not occur. For example, in August 2011, Standard and Poors
downgraded the U.S.s credit rating to account for the risk that U.S. lawmakers would fail to raise the debt ceiling and/or reduce its overall deficit. Such a downgrade could continue to impact the stability of future U.S. treasury auctions and
affect the trading market for U.S. government securities. Uncertainty surrounding U.S. congressional action or inaction could impact the trading market for U.S. government securities or impair the U.S. governments ability to satisfy its
obligations under such treasury securities. These factors could impact the liquidity or valuation of our current portfolio of cash, cash equivalents and possible investments. If any such losses or significant deteriorations occur, it may negatively
impact or impair our current portfolio of cash, cash equivalents and possible investments, which may affect our ability to fund future obligations. Further, unless and until the current U.S. and global political, credit and financial market crisis
has been sufficiently resolved, it may be difficult for us to liquidate our investments prior to their maturity without incurring a loss, which would have a material adverse effect on our business, operating results and financial condition.

Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by manmade problems
such as network security breaches, computer viruses or terrorism.

Our corporate headquarters are located in the San Francisco
Bay Area, and many of our contract manufacturers are located in eastern Asia, both regions known for seismic activity. A significant natural disaster, such as an earthquake, a fire or a flood, occurring near our headquarters, or near the facilities
of our contract manufacturers, could have a material adverse impact on our business, operating results and financial condition. Despite the implementation of network security measures, our networks also may be vulnerable to computer viruses,
break-ins and similar disruptions from unauthorized tampering with our products. In addition, natural disasters, acts of terrorism or war could cause disruptions in our or our customers businesses, our suppliers and manufacturers
operations or the economy as a whole. We also rely on information technology systems to communicate among our workforce and with third parties. Any disruption to our communications, whether caused by a natural disaster or by manmade problems, such
as power disruptions, could adversely affect our business. To the extent that any such disruptions result in delays or cancellations of customer orders or impede our suppliers and/or our manufacturers ability to timely deliver our
products and product components, or the deployment of our products, our business, operating results and financial condition would be adversely affected.

New regulations or standards or changes in existing regulations or standards in the United States or
internationally related to our products may result in unanticipated costs or liabilities, which could have a material adverse effect on our business, results of operations and future sales, and could place additional burdens on the operations of our
business.

Our products are subject to governmental regulations in a variety of jurisdictions. In order to achieve and maintain
market acceptance, our products must continue to comply with these regulations as well as a significant number of industry standards. In the United States, our products must comply with various regulations defined by the Federal Communications
Commission, or FCC, Underwriters Laboratories and others. We must also comply with similar international regulations. For example, our wireless communication products operate through the transmission of radio signals, and radio emissions are subject
to regulation in the United States and in other countries in which we do business. In the United States, various federal agencies including the Center for Devices and Radiological Health of the Food and Drug Administration, the FCC, the Occupational
Safety and Health Administration and various state agencies have promulgated regulations that concern the use of radio/electromagnetic emissions standards. Member countries of the European Union have enacted similar standards concerning electrical
safety and electromagnetic compatibility and emissions, and chemical substances and use standards.

As these regulations and standards
evolve, and if new regulations or standards are implemented, we will be required to modify our products or develop and support new versions of our products, and our compliance with these regulations and standards may become more burdensome. The
failure of our products to comply, or delays in compliance, with the various existing and evolving industry regulations and standards could prevent or delay introduction of our products, which could harm our business. End-customer uncertainty
regarding future policies may also affect demand for communications products, including our products. Moreover, channel partners or end-customers may require us, or we may otherwise deem it necessary or advisable, to alter our products to address
actual or anticipated changes in the regulatory environment. Our inability to alter our products to address these requirements and any regulatory changes may have a material adverse effect on our business, operating results and financial condition.

We are evaluating and may adopt a corporate structure more closely aligned with the international nature of our business activities, which will
require us to incur expenses but could fail to achieve the intended benefits.

We intend to reorganize our corporate structure
and intercompany relationships to more closely align with the international nature of our business activities. This proposed corporate structure may result in a reduction in our overall effective tax rate through changes in how we use our
intellectual property, international procurement, and sales operations. This proposed corporate structure may also allow us to obtain financial and operational efficiencies. These efforts will require us to incur expenses in the near term for which
we may not realize related benefits. If the intended structure is not accepted by the applicable taxing authorities, changes in domestic and international tax laws negatively impact the proposed structure, including proposed legislation to reform
U.S. taxation of international business activities, or we do not operate our business consistent with the proposed structure and applicable tax provisions, we may fail to achieve the financial and operational efficiencies that we anticipate as a
result of the proposed structure and our future financial condition and results of operations may be negatively impacted.

Our international operations expose us to additional business risks and failure to manage these risks may adversely affect our international revenue.

We derive a significant portion of our revenues from customers outside the United States. For the years ended December 31,
2010 and 2011, 70% and 65% of our revenue, respectively, was attributable to our international customers. As of December 31, 2011, approximately 61% of our full-time employees were located abroad. We expect that our international activities
will be dynamic over the foreseeable future as we continue to pursue opportunities in international markets, which will require significant management attention and financial resources. Therefore, we are subject to risks associated with having
worldwide operations.

We have a limited history of marketing, selling, and supporting our products and services internationally. As a
result, we must hire and train experienced personnel to staff and manage our foreign operations. To the extent that we experience difficulties in recruiting, training, managing, and retaining an international staff, and specifically staff related to
sales management and sales personnel, we may experience difficulties in sales productivity in foreign markets. In addition, business practices in the international markets that we serve may differ from those in the United States and may require us
to include non-standard terms in customer contracts, such as extended payment or warranty terms. To the extent that we may enter into contracts with our international customers in the future that include non-standard terms related to payment,
warranties or performance obligations, our operating results may be adversely impacted. International operations are subject to other inherent risks and our future results could be adversely affected by a number of factors, including:

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tariffs and trade barriers, export regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign
markets;

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requirements or preferences for domestic products, which could reduce demand for our products;

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differing technical standards, existing or future regulatory and certification requirements and required product features and functionality;

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management communication and integration problems related to entering new markets with different languages, cultures and political systems;

heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial
results and result in restatements of, and irregularities in, financial statements;

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difficulties and costs of staffing and managing foreign operations;

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the uncertainty of protection for intellectual property rights in some countries;

international operations. Our failure to manage any of these risks successfully could harm our international operations and reduce our international sales, adversely affecting our business,
operating results and financial condition.

We may not successfully sell our products in certain geographic markets or develop and manage new
sales channels in accordance with our business plan.

We expect to continue to sell our products in certain geographic markets
where we do not have significant current business and to a broader customer base. To succeed in certain of these markets, we believe we will need to develop and manage new sales channels and distribution arrangements. Because we have limited
experience in developing and managing such channels, we may not be successful in further penetrating certain geographic regions or reaching a broader customer base. Failure to develop or manage additional sales channels effectively would limit our
ability to succeed in these markets and could adversely affect our ability to grow our customer base and revenue.

We are exposed to fluctuations
in currency exchange rates, which could negatively affect our financial condition and operating results.

To date, substantially
all of our international sales have been denominated in U.S. dollars; however, most of our expenses associated with our international operations are denominated in local currencies. As a result, a decline in the value of the U.S. dollar relative to
the value of these local currencies could have a material adverse effect on the gross margins and profitability of our international operations. Conversely, an increase in the value of the U.S. dollar relative to the value of these local currencies
results in our products being more expensive to potential customers and could have an adverse impact on our pricing or our ability to sell our products internationally. To date, we have not used risk management techniques to hedge the risks
associated with these fluctuations. Even if we were to implement hedging strategies, not every exposure can be hedged and, where hedges are put in place based on expected foreign currency exchange exposure, they are based on forecasts that may vary
or that may later prove to have been inaccurate. As a result, fluctuations in foreign currency exchange rates or our failure to successfully hedge against these fluctuations could have a material adverse effect on our operating results and financial
condition.

Failure to comply with the U.S. Foreign Corrupt Practices Act and similar laws associated with our activities outside the United
States could subject us to penalties and other adverse consequences.

A significant portion of our revenues is and will be from
jurisdictions outside of the United States. As a result, we are subject to the U.S. Foreign Corrupt Practices Act, or the FCPA, which generally prohibits U.S. companies and their intermediaries from making corrupt payments to foreign officials for
the purpose of directing, obtaining or keeping business, and requires companies to maintain reasonable books and records and a system of internal accounting controls. The FCPA applies to companies and individuals alike, including company directors,
officers, employees and agents. Under the FCPA, U.S. companies may be held liable for the corrupt actions taken by employees, strategic or local partners or other representatives. In addition, the government may seek to rely on a theory of successor
liability and hold us responsible for FCPA violations committed by companies or associated with assets which we acquire.

In many
foreign countries where we operate, particularly in countries with developing economies, it may be a local custom for businesses to engage in practices that are prohibited by the FCPA or other similar laws and regulations. In contrast, we have
implemented a company policy requiring our employees and consultants to comply with the FCPA and similar laws. Although we have not conducted formal FCPA compliance training, we are in the process of devising a training schedule for

certain of our employees, agents and partners. Nevertheless, there can be no assurance that our employees, partners and agents, as well as those companies to which we outsource certain of our
business operations, will not take actions in violation of the FCPA or our policies for which we may be ultimately held responsible. As a result of our rapid growth, our development of infrastructure designed to identify FCPA matters and monitor
compliance is at an early stage. If we or our intermediaries fail to comply with the requirements of the FCPA or similar legislation, governmental authorities in the U.S. and elsewhere could seek to impose civil and/or criminal fines and penalties
which could have a material adverse effect on our business, operating results and financial conditions. We may also face collateral consequences such as debarment and the loss of our export privileges.

We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and
subject us to liability if we are not in compliance with applicable laws.

Our products and solutions are subject to export
control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Departments Office of Foreign Assets
Controls. Exports of our products and solutions must be made in compliance with these laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal
penalties, including the possible loss of export or import privileges, fines, which may be imposed on us and responsible employees or managers, and, in extreme cases, the incarceration of responsible employees or managers. In addition, if our
channel partners fail to obtain appropriate import, export or re-export licenses or authorizations, we may also be adversely affected through reputational harm and penalties. Obtaining the necessary authorizations, including any required license,
for a particular sale may be time-consuming, is not guaranteed and may result in the delay or loss of sales opportunities. Changes in our products or solutions or changes in applicable export or import laws and regulations may also create delays in
the introduction and sale of our products and solutions in international markets, prevent our end-customers with international operations from deploying our products and solutions or, in some cases, prevent the export or import of our products and
solutions to certain countries, governments or persons altogether. Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or
technologies targeted by such laws and regulations, could also result in decreased use of our products and solutions, or in our decreased ability to export or sell our products and solutions to existing or potential end-customers with international
operations. Any decreased use of our products and solutions or limitation on our ability to export or sell our products and solutions would likely adversely affect our business, financial condition and results of operations.

Furthermore, we incorporate encryption technology into certain of our products and solutions. Various countries regulate the import of certain
encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products and solutions or could limit our customers ability to implement our products
and solutions in those countries. Encryption products and solutions and the underlying technology may also be subject to export control restrictions. Governmental regulation of encryption technology and regulation of imports or exports of encryption
products, or our failure to obtain required import or export approval for our products and solutions, when applicable, could harm our international sales and adversely affect our revenues. Compliance with applicable regulatory laws and regulations
regarding the export of our products and solutions, including with respect to new releases of our solutions, may create delays in the introduction of our products and solutions in international markets, prevent our end-customers with international
operations from deploying our products and solutions throughout their globally-distributed systems or, in some cases, prevent the export of our products and solutions to some countries altogether.

U.S. export control laws and economic sanctions programs also prohibit the shipment of certain
products and services to countries, governments and persons that are subject to U.S. economic embargoes and trade sanctions. Even though we take precautions to prevent our products and solutions from being shipped or provided to U.S. sanctions
targets, our products and solutions could be shipped to those targets or provided by third-parties despite such precautions. Any such shipment could have negative consequences, including government investigations, penalties and reputational harm.
Furthermore, any new embargo or sanctions program, or any change in the countries, governments, persons or activities targeted by such programs, could result in decreased use of our products and solutions, or in our decreased ability to export or
sell our products and solutions to existing or potential end-customers, which would likely adversely affect our business and our financial condition.

Risks Related to Our Intellectual Property

Claims by others that we infringe their intellectual
property rights could harm our business.

Our industry is characterized by vigorous protection and pursuit of intellectual
property rights, which has resulted in protracted and expensive litigation for many companies. We are subject to claims and litigation by third parties that we infringe their intellectual property rights and we expect claims and litigation with
respect to infringement to occur in the future. As our business expands and the number of products and competitors in our market increases and overlaps occur, we expect that infringement claims may increase in number and significance. Any claims or
proceedings against us, whether meritorious or not, could be time-consuming, result in costly litigation, require significant amounts of management time or result in the diversion of significant operational resources, any of which could materially
and adversely affect our business and operating results.

Intellectual property lawsuits are subject to inherent uncertainties due to
the complexity of the technical issues involved, and we cannot be certain that we will be successful in defending ourselves against intellectual property claims. In addition, we currently have a limited portfolio of issued patents compared to our
larger competitors, and therefore may not be able to effectively utilize our intellectual property portfolio to assert defenses or counterclaims in response to patent infringement claims or litigation brought against us by third parties. Further,
litigation may involve patent holding companies or other adverse patent owners who have no relevant products or revenues and against whom our potential patents provide no deterrence, and many other potential litigants have the capability to dedicate
substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Furthermore, a successful claimant could secure a judgment that requires us to pay substantial damages or prevents
us from distributing certain products or performing certain services. We might also be required to seek a license and pay royalties for the use of such intellectual property, which may not be available on commercially acceptable terms or at all.
Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and may ultimately not be successful.

If we are unable to protect our intellectual property rights, our competitive position could be harmed or we could be required to incur significant expenses to enforce our rights.

Our ability to compete effectively is dependent in part upon our ability to protect our proprietary technology. We protect our proprietary
information and technology through licensing agreements, third-party nondisclosure agreements and other contractual provisions, as well as through patent, trademark, copyright and trade secret laws in the United States and similar laws in other
countries. There can be no assurance that these protections will be available in all cases or will be adequate to prevent our competitors from copying, reverse engineering or otherwise obtaining and using our technology, proprietary rights or
products. The laws of some foreign countries, including countries in

which our products are sold or manufactured, are in many cases not as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual
property rights may be inadequate. In addition, third parties may seek to challenge, invalidate or circumvent our patents, trademarks, copyrights and trade secrets, or applications for any of the foregoing. There can be no assurance that our
competitors will not independently develop technologies that are substantially equivalent or superior to our technology or design around our proprietary rights. We have focused patent, trademark, copyright and trade secret protection primarily in
the United States, China, Taiwan and Europe. As a result, we may not have sufficient protection of our intellectual property in all countries where infringement may occur. In each case, our ability to compete could be significantly impaired.

To prevent substantial unauthorized use of our intellectual property rights, it may be necessary to prosecute actions for infringement
and/or misappropriation of our proprietary rights against third parties. Any such action could result in significant costs and diversion of our resources and managements attention, and there can be no assurance that we will be successful in
such action. Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than we do. Accordingly, despite our efforts, we may not be able to
prevent third parties from infringing upon or misappropriating our intellectual property.

We are generally obligated to indemnify our channel
partners and end-customers for certain expenses and liabilities resulting from intellectual property infringement claims regarding our products, which could force us to incur substantial costs.

We have agreed, and expect to continue to agree, to indemnify our channel partners and end-customers for certain intellectual property infringement
claims regarding our products. As a result, in the case of infringement claims against these channel partners and end-customers, we could be required to indemnify them for losses resulting from such claims or to refund amounts they have paid to us.
Some of our channel partners and end-customers have sought, and we expect that certain of our channel partners and end-customers in the future may seek, indemnification from us in connection with infringement claims brought against them. In
addition, some of our channel partners and end-customers have tendered to us the defense of claims brought against them for infringement. We evaluate each such request on a case-by-case basis and we may not succeed in refuting all such claims. If a
channel partner or end-customer elects to invest resources in enforcing a claim for indemnification against us, we could incur significant costs disputing it. If we do not succeed in disputing it, we could face substantial liability.

We rely on the availability of third-party licenses. If these licenses are available to us only on less favorable terms or not at all in the future, our
business and operating results would be harmed.

We have incorporated third-party licensed technology into our products. For
example, our products incorporate certain technology that we license from Qualcomm Atheros. It may be necessary in the future to renew licenses relating to various aspects of these products or to seek additional licenses for existing or new
products. There can be no assurance that the necessary licenses will be available on acceptable terms or at all. The inability to obtain certain licenses or other rights, or to obtain those licenses or rights on favorable terms, or the need to
engage in litigation regarding these matters, could result in delays in product releases until such time, if ever, as equivalent technology could be identified, licensed or developed and integrated into our products and might have a material adverse
effect on our business, operating results and financial condition. Moreover, the inclusion in our products of intellectual property licensed from third parties on a nonexclusive basis could limit our ability to protect our proprietary rights in our
products.

Our use of open source software could impose limitations on our ability to commercialize our products.

Our products contain software modules licensed for use from third-party authors under open source licenses, such as Linux and
Cassandra. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims
or the quality of the code. Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use. If we combine our proprietary software
with open source software in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary software to the public. This could allow our competitors to create similar products with
lower development effort and time, and ultimately could result in a loss of product sales for us.

Although we monitor our use of open
source software, the terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to
commercialize our products. In such event, we could be required to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot
be accomplished on a timely basis, any of which could materially and adversely affect our business and operating results.

Risks
Related to this Offering and Ownership of our Common Stock

The price of our common stock may be volatile, and you could lose all or part of
your investment.

The trading price of our common stock following this offering may fluctuate substantially and may be higher or
lower than the initial public offering price. The trading price of our common stock following this offering will depend on a number of factors, including those described in this Risk Factors section, many of which are beyond our control
and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid in this offering. Factors
that could cause fluctuations in the trading price of our common stock include the following:

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price and volume fluctuations in the overall stock market from time to time;

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volatility in the market prices and trading volumes of high technology stocks;

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changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;

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sales of shares of our common stock by us or our stockholders;

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failure of financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our company, or our failure to meet these
estimates or the expectations of investors;

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the financial projections we may provide to the public, any changes in those projections or our failure to meet those projections;

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announcements by us or our competitors of new products or new or terminated significant contracts, commercial relationships or capital commitments;

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the publics reaction to our press releases, other public announcements and filings with the SEC;

general economic conditions and slow or negative growth of our markets; and

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other events or factors, including those resulting from war, incidents of terrorism or responses to these events.

In addition, the stock market in general, and the market for technology companies in particular, have experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating
performance. In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies securities, securities class action litigations have often been instituted against these companies.
Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our managements attention and resources.

Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, could reduce the price that our common stock
might otherwise attain and may dilute your voting power and your ownership interest in us.

Sales of a substantial number of
shares of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a
time and price that you deem appropriate. Based on the total number of outstanding shares of our common stock as of , 2012, upon
completion of this offering, we will have shares of common stock outstanding, assuming no exercise of our outstanding options.

All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities
Act of 1933, as amended, or the Securities Act, except for any shares held by our affiliates as defined in Rule 144 under the Securities Act.

Subject to certain exceptions described under the caption Underwriting, we and all of our directors and officers and substantially all of our equity holders have agreed not to offer, sell or agree to
sell, directly or indirectly, any shares of common stock without the permission of Goldman, Sachs & Co. and Morgan Stanley & Co. LLC for a period of 180 days from the date of this prospectus, subject to potential extension in the
event we release earnings results or material news or a material event relating to us occurs near the end of the lock-up period. When the lock-up period expires, we and our

locked-up security holders will be able to sell our shares in the public market. In addition, the underwriters may, in their sole discretion, release all or some portion of the shares subject to
lock-up agreements prior to the expiration of the lock-up period. See Shares Eligible for Future Sale for more information. Sales of a substantial number of such shares upon expiration, or the perception that such sales may occur, or
early release of the lock-up, could cause our share price to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

Based on shares outstanding as of , 2012, upon completion of this offering, holders of up to
approximately shares, or %, of our common stock will have rights, subject to some conditions, to require us to file registration statements covering the
sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also intend to register the offer and sale of all shares of common stock that we may issue under our equity
compensation plans.

We may issue our shares of common stock or securities convertible into shares of our common stock from time to time
in connection with a financing, acquisition, investments or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

Insiders will continue to have substantial control over us after this offering, which could limit your ability to influence the outcome of key transactions,
including a change of control.

Our directors, executive officers and each of our stockholders who own greater than 5% of our
outstanding common stock and their affiliates, in the aggregate, will beneficially own approximately % of the outstanding shares of our common stock after this offering, based on the number of shares outstanding as of
, 2012 and after giving effect to the exercise of options and the sale of shares by the selling stockholders in connection with
this offering. As a result, these stockholders, if acting together, will be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other
extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or
deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

No public market for our common stock currently exists, and an active public trading market may not develop or be sustained following this offering.

Prior to this offering, there has been no public market or active private market for our common stock. Although we have applied
to list our common stock on , an active trading market may not develop following the completion of this offering or, if
developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the market price of
your shares of common stock. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

The net proceeds from the sale of shares by us in the offering may be used for general corporate purposes, including working capital. We may also
use a portion of the net proceeds to acquire or invest

in complementary businesses, technologies or other assets. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part
of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds to us from this offering may be invested with a view towards long-term benefits for our stockholders, and this may not increase our operating
results or the market value of our common stock. Until the net proceeds are used, they may be placed in investments that do not produce significant income or that may lose value.

We do not intend to pay dividends for the foreseeable future, and as a result your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the
foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board
of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

The requirements of being a public company may strain our resources, divert managements attention and affect our ability to attract and retain
qualified members of our board of directors.

As a public company, we will be subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, or the Exchange Act, the Dodd-Frank Act, the listing requirements of the
, or
, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and
financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with
respect to our business and operating results. We expect the capitalized costs of our initial public offering to be between approximately $3.0 million to $4.0 million and the on-going expense of being a public company to be between approximately
$2.5 million and $3.5 million annually, not including costs associated with compliance with Section 404 of the Sarbanes-Oxley Act, which we expect will be required in 2014.

We also expect that being a public company will make it more expensive for us to obtain director and officer liability insurance, and we may be
required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit
committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this prospectus and
in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful,
our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and
harm our business and operating results.

As part of our business strategy, we may make
investments in complementary companies, products or technologies. However, we have not made any significant acquisitions to date, and as a result, our ability as an organization to acquire and integrate other companies, products or

technologies in a successful manner is unproven. We may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. If
we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by our end-customers, investors and financial analysts. In addition, if we are
unsuccessful at integrating such acquisitions, or the technologies associated with such acquisitions, into our company, the revenue and operating results of the combined company could be adversely affected. Any integration process may require
significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction,
including accounting charges. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition or the value of our common stock. The sale of equity or
issuance of debt to finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our
ability to manage our operations.

Our future capital needs are uncertain, and we may need to raise additional funds in the future. If we require
additional funds in the future, those funds may not be available on acceptable terms, or at all.

We believe that our existing
cash and cash equivalents will be sufficient to meet our anticipated cash requirements for at least the next 12 months. We may, however, need to raise substantial additional capital to:



fund our operations;



continue our research and development;



develop and commercialize new products; or



acquire companies, in-licensed products or intellectual property.

Our future funding requirements will depend on many factors, including:



market acceptance of our products and services;



the cost of our research and development activities;



the cost of defending, in litigation or otherwise, claims that we infringe third-party patents or violate other intellectual property rights;



the cost and timing of establishing additional sales, marketing and distribution capabilities;



the cost and timing of establishing additional technical support capabilities;



the effect of competing technological and market developments; and



the market for different types of funding and overall economic conditions.

We may require additional funds in the future, and we may not be able to obtain those funds on acceptable terms, or at all. If we raise additional
funds by issuing equity securities, our stockholders may experience dilution. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt or additional equity financing that we
raise may contain terms that are not favorable to us or our stockholders.

If we do not have, or are not able to obtain, sufficient funds, we may have to delay development or
commercialization of our products or license to third parties the rights to commercialize products or technologies that we would otherwise seek to commercialize. If we raise additional funds through collaboration and licensing arrangements with
third parties, it may be necessary to relinquish some rights to our technologies or our products, or to grant licenses on terms that are not favorable to us. If we are unable to raise adequate funds, we may have to liquidate some or all of our
assets, or delay, reduce the scope of or eliminate some or all of our development programs. We also may have to reduce marketing, customer support or other resources devoted to our products or cease operations. Any of these actions could harm our
operating results.

We are an Emerging Growth Company, and any decision on our part to comply only with certain reduced disclosure
requirements applicable to Emerging Growth Companies could make our common stock less attractive to investors.

We are an
emerging growth company, as defined in the Jumpstart Our Business Startups Act enacted in April 2012, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from
various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years after the completion of this offering, although if the market value of our common stock that is held by
non-affiliates exceeds $700 million as of any June 30 before that time or if we have total annual gross revenues of $1 billion or more during any fiscal year before that time, we would cease to be an emerging growth company as of
the end of that fiscal year, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an emerging growth company immediately. We cannot predict if investors will find our common stock less
attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and our stock price
may be more volatile.

Under the Jumpstart Our Business Startups Act, emerging growth companies can delay adopting new or revised
accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or
revised accounting standards as other public companies that are not emerging growth companies.

If financial or industry analysts do not publish
research or reports about our business, or if they issue an adverse or misleading opinion regarding our common stock, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts or the content and
opinions included in their reports. As a new public company, we may be slow to attract research coverage and the analysts who publish information about our common stock will have had relatively little experience with our company, which could affect
their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. In the event we obtain industry or financial analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion
regarding our stock price, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause
our stock price or trading volume to decline.

Certain provisions in our charter documents and under Delaware law could limit attempts by our stockholders to
replace or remove members of our board of directors or current management and may adversely affect the market price of our common stock.

Provisions in our certificate of incorporation and bylaws each as will be effective upon completion of this offering, may have the effect of delaying or preventing a change of control or changes in our board or
directors or management. These provisions include the following:



our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal
of a director, which prevents stockholders from being able to fill vacancies on our board of directors;



our stockholders may not act by written consent or call special stockholders meetings; as a result, a holder, or holders, controlling a majority of our
capital stock would not be able to take certain actions other than at annual stockholders meetings or special stockholders meetings called by the board of directors, the chairman of the board, the chief executive officer or the
president;



our certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director
candidates;



stockholders must provide advance notice and additional disclosures in order to nominate individuals for election to the board of directors or to propose matters
that can be acted upon at a stockholders meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquirors own slate of directors or otherwise attempting to obtain control of our
company; and



our board of directors may issue, without stockholder approval, shares of undesignated preferred stock; the ability to issue undesignated preferred stock makes
it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.

As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, a corporation may not engage in a
business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the board of directors has approved the transaction. Our board of directors could rely on Delaware
law to prevent or delay an acquisition of us.

Certain of our executive officers or directors may be entitled to accelerated vesting of
their stock options pursuant to the terms of their employment arrangements or option grants upon a change of control of the company. In addition to the arrangements currently in place with some of our executive officers, we may enter into similar
arrangements in the future with other officers. Such arrangements could delay or discourage a potential acquisition of the company.

Because the
initial public offering price of our common stock will be substantially higher than the pro forma net tangible book value per share of our outstanding common stock following this offering, new investors will experience immediate and substantial
dilution.

The initial public offering price will be substantially higher than the pro forma net tangible book value per share of
our common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchase shares of our common stock in this offering, you will experience immediate dilution of
$ per share, the difference between the price per share you pay for our common stock and its pro forma net tangible book value per share as of
, 2012, after giving effect to the issuance of shares of our common stock in this offering. See Dilution for more
information.

This prospectus, particularly in the sections titled Prospectus Summary, Risk Factors, Managements Discussion
and Analysis of Financial Condition and Results of Operations and Business, contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in
this prospectus, including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as believe, will, may, estimate, continue, anticipate, intend, should, plan, expect,
predict, could, potentially or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and
financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions described under the
section titled Risk Factors and elsewhere in this prospectus, regarding, among other things:

other risk factors included under the section titled Risk Factors in this prospectus.

These risks are not exhaustive. Other sections of this prospectus may include additional factors that could adversely impact our business and
financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all
factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances
reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking

statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any
forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement on Form S-1, of which this prospectus is a part, that we have filed
with the SEC with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Unless otherwise indicated, information contained in this prospectus concerning our industry and the market in which we operate, including our
general expectations and market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets
for our services. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Gartner Report, Forecast Analysis: Enterprise WLAN Equipment, Worldwide, 2007-2016, 2Q12
Update, Analyst Christian Canales, June 2012, which we refer to as the Gartner Report, represents data, research opinions or viewpoints published, as part of a syndicated subscription service, by Gartner and are not representations of fact.
The Gartner Report speaks as of its original publication date and not as of the date of this prospectus, and the opinions expressed in the Gartner Report are subject to change without notice.

Industry data and other third-party information have been obtained from sources believed to be reliable, but we have not independently verified any
third-party information. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of
factors, including those described in the section titled Risk Factors and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by
us.

We estimate that the net proceeds we will receive from this offering will be approximately $
million, or $ million if the underwriters exercise their option to purchase additional shares in full, assuming an initial public offering price of $ per
share, which is the midpoint of the range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the
sale of shares by the selling stockholders, although we will bear the costs, other than underwriting discounts and commissions, associated with those sales.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the net proceeds to us from this offering by
$ , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and
estimated expenses payable by us.

The principal purposes of this offering are to create a public market for our common stock and
thereby enable access to the public equity markets by our employees and stockholders, obtain additional capital and increase our visibility in the marketplace. As of the date of this prospectus we have no specific plans for the use of the net
proceeds we receive from this offering. We intend to use the net proceeds from this offering for working capital and other general corporate purposes, including sales and marketing activities and products development. We may also use a portion of
the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments. Pending these uses,
we plan to invest these net proceeds in short-term, interest bearing obligations, investment grade instruments, certificates of deposit or direct or guaranteed obligations of the United States. The goal with respect to the investment of these net
proceeds is capital preservation and liquidity so that such funds are readily available to fund our operations.

We will have broad
discretion in the application of the net proceeds and investors will be relying on the judgment of our management regarding the application of the net proceeds of this offering.

DIVIDEND POLICY

We have never declared or paid dividends on our capital stock. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our
business. We do not intend to declare or pay cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors subject to applicable laws, and will depend
upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements. Our future ability to pay cash dividends on our stock may be limited by the terms of any future debt or preferred
securities.

The following table sets forth our cash and cash equivalents, restricted cash and our capitalization as of June 30, 2012 on:



an actual basis;



a pro forma basis after giving effect to:



the conversion of the outstanding shares of our preferred stock into an aggregate of 47,875,371 shares of our common stock, which will occur automatically upon
the closing of this offering; and



the filing of our amended and restated certificate of incorporation; and



a pro forma as adjusted basis to give further effect to the sale by us of shares of common stock in this offering at an assumed initial public offering price of
$ per share, the midpoint of the range listed on the cover page of this prospectus, and our receipt of the estimated net proceeds from that sale after deducting the estimated underwriting discounts and
commissions and estimated offering expenses payable by us.

You should read this table together with the sections of
this prospectus entitled Selected Consolidated Financial Data, Description of Capital Stock and Managements Discussion and Analysis of Financial Condition and Results of Operations and our financial
statements and related notes included elsewhere in this prospectus.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the pro forma as
adjusted stockholders equity by $ and our total capitalization by $ , or $ if the underwriters
exercise their option to purchase additional shares in full, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and
estimated expenses payable by us.

The outstanding share information in the table above excludes, as of June 30, 2012, the following
shares:



23,875,629 shares of our common stock issuable upon the exercise of options outstanding under our 2002 Stock Plan and our 2012 Equity Incentive Plan at a
weighted average exercise price of $2.40 per share;

Dilution is the amount by which the offering price paid by the purchasers of the shares of common stock sold in the offering exceeds the net
tangible book value per share of common stock after the offering. Net tangible book value per share is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the
number of shares of common stock deemed to be outstanding at that date.

The historical net tangible book value per share of our common
stock as of June 30, 2012 was $(31.9) million, or $(1.71) per share. Our pro forma net tangible book value as of June 30, 2012 was $44.2 million, or $0.67 per share, which gives effect to the conversion of all outstanding shares of
our preferred stock into an aggregate of 47,875,371 shares of our common stock immediately prior to the completion of this offering. After giving effect to the receipt of approximately $ million of
estimated net proceeds from our sale of shares of common stock in this offering at an assumed offering price of $ per share, which is the midpoint of the range listed on the cover page of this
prospectus, our pro forma as adjusted net tangible book value as of June 30, 2012 would have been $ million, or $ per share. This represents an immediate
increase in net tangible book value of $ per share to existing stockholders and an immediate dilution of $ per share to new investors purchasing shares
of common stock in the offering. The following table illustrates this substantial and immediate per share dilution to new investors:

Assumed initial public offering price per share (the midpoint of the range listed on the cover page of this prospectus)

$

Net tangible book value per share as of June 30, 2012.

$

(1.71

)

Increase per share attributable to conversion of preferred stock

$

2.38

Pro forma net tangible book value per share at June 30, 2012

$

0.67

Pro forma increase per share attributable to this offering

$

Pro forma as adjusted net tangible book value per share after giving effect to this offering

$

Dilution in net tangible book value per share to new investors

$

A $1.00 increase (decrease) in the assumed initial public offering price of
$ per share, which is the midpoint of the range listed on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value by
$ , the pro forma as adjusted net tangible book value per share by $ per share and the dilution per share to new investors in this offering by
$ , or $ if the underwriters exercise their option to purchase additional shares in full, assuming the number of shares offered by us, as set forth on the
cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us.

The following table summarizes, as of June 30, 2012:



the total number of shares of common stock purchased from us by our existing stockholders and by new investors purchasing shares in this offering;



the total consideration paid to us by our existing stockholders and by new investors purchasing shares in this offering, assuming an initial public offering of
$ per share, which is the midpoint of the range listed on the cover page of this prospectus (before deducting the estimated underwriting discounts and commissions and estimated offering expenses
payable by us in connection with this offering); and

the average price per share paid by existing stockholders and by new investors purchasing shares in this offering.

Shares Purchased

Total Consideration

Average PricePer
Share

Number

Percent

Amount

Percent

Existing stockholders

%

$

%

$

New investors

Total

100.0

%

$

100.0

%

The tables and calculations above are based on the number of shares of our common stock outstanding as of June 30,
2012, but do not include, as of June 30, 2012, the following shares:



23,875,629 shares of our common stock issuable upon the exercise of options outstanding under our 2002 Stock Plan and our 2012 Equity Incentive Plan at a
weighted average exercise price of $2.40 per share;

358,780 shares of our common stock issuable upon the exercise of outstanding common stock warrants at a weighted average exercise price of $2.52 per share; and



322,868 shares of our common stock issuable upon the exercise of outstanding preferred stock warrants at a weighted average exercise price of $1.50 per share.

A $1.00 increase (decrease) in the assumed initial public offering price of
$ per share would increase (decrease) total consideration paid by existing stockholders, total consideration paid by new investors and the average price per share by
$ , $ and $ , respectively, assuming the number of shares offered by us, as set forth on the cover page of
this prospectus, remains the same and without deducting the estimated underwriting discounts and commissions and estimated expenses payable by us.

The foregoing table does not reflect the sales by existing stockholders in connection with sales made by them in this offering. Sales by the selling stockholders in this offering will reduce the number of shares
held by existing stockholders to shares, or % of the total number of shares of our common stock outstanding after this offering, and will increase the
number of shares held by new investors to shares, or % of the total number of shares of our common stock outstanding after this offering. In addition,
if the underwriters exercise their option to purchase additional shares in full, the number of shares held by the existing stockholders after this offering would be reduced to
shares, or % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by new investors
would increase to shares, or %, of the total number of shares of our common stock outstanding after this offering.

You should read the following selected consolidated financial data together with Managements Discussion and Analysis of Financial
Condition and Results of Operations and our consolidated financial statements and the related notes included in this prospectus. The consolidated statements of operations data for the years ended December 31, 2010 and 2011 and the
consolidated balance sheet data as of December 31, 2010 and 2011 are derived from the audited consolidated financial statements that are included elsewhere in this prospectus. The consolidated statements of operations data for the six months
ended June 30, 2011 and 2012 and the consolidated balance sheet data as of June 30, 2012 are derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. We have included, in our opinion, all adjustments,
consisting only of normal recurring adjustments that we consider necessary for a fair presentation of the financial information set forth in those statements. The consolidated statements of operations data for the year ended December 31, 2009
as well as the consolidated balance sheet data as of December 31, 2009, are derived from unaudited consolidated financial statements that are not included in this prospectus. Our historical results are not necessarily indicative of the results
to be expected in the future, and our interim results are not necessarily indicative of the results to be expected for the full year or any other period. Amounts are in thousands, except per share data.

Pro forma basic and diluted net loss per common share have been calculated assuming the conversion of all outstanding shares of preferred stock
into 47,875,371 shares of common stock. See Note 11 to our consolidated financial statements for an explanation of the method used to determine the number of shares used in computing historical and pro forma basic and diluted net loss per common
share.

We adopted ASU 2009-13 and ASU 2009-14 at the beginning of 2010 on a prospective basis for applicable arrangements originating or materially modified after January 1, 2010.
Revenues and net income for 2010 were higher by $2.8 million than they would have been prior to the adoption of ASU 2009-13 and ASU 2009-14.

Stock-based compensation expense included in the statements of operations data above was as follows:

Years Ended December 31,

Six Months EndedJune 30,

2009

2010

2011

2011

2012

(in thousands)

(unaudited)

(unaudited)

Cost of revenues

$

65

$

82

$

148

$

49

$

53

Research and development

327

468

1,055

332

757

Sales and marketing

149

242

471

148

558

General and administrative

250

421

594

250

1,510

Total stock-based compensation expense

$

791

$

1,213

$

2,268

$

779

$

2,878

As of December 31,

As of June 30, 2012

2009

2010

2011

Actual

ProForma(1)

Pro Forma AsAdjusted(2)

(in thousands)

(unaudited)

(unaudited)

Consolidated Balance Sheet Data:

Cash and cash equivalents

$

10,597

$

1,891

$

11,200

$

31,270

$

31,270

$

Working capital

9,648

4,418

(2,927

)

26,508

26,508

Total assets

28,133

29,790

65,690

112,794

112,794

Deferred revenue, current and long term

10,494

10,280

17,181

21,281

21,281

Redeemable convertible preferred stock

50,919

51,257

51,257

76,140



Total stockholders equity (deficit)

(51,702

)

(54,835

)

(44,743

)

(17,227

)

58,913

(1)

The pro forma column reflects the automatic conversion of all outstanding shares of our preferred stock into 47,875,371 shares of our common stock immediately prior to the
closing of this offering.

(2)

The pro forma as adjusted balance sheet data reflects the items described in footnote (1) above, as well as the estimated net proceeds of
$ million from our sale of shares of common stock that we are offering at the initial public offering price of
$ per share, after deducting the underwriting fees and commissions and estimated offering expenses payable by us.

You should read the following discussion and analysis of our financial condition and results of operations together with the Selected Consolidated Financial Data section of this prospectus and our
consolidated financial statements and related notes appearing elsewhere in this prospectus. Our audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP.
This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the Risk Factors and Special Note Regarding Forward-Looking Statements
sections and elsewhere in this prospectus, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

Ruckus is a leading provider of carrier-class Wi-Fi solutions. Our solutions, which
we call Smart Wi-Fi, are used by service providers and enterprises to solve network capacity and coverage challenges associated with the rapidly increasing traffic and number of users on wireless networks. Our Smart Wi-Fi solutions offer
carrier-class enhanced reliability, consistent performance, extended range and massive scalability. Our products include gateways, controllers and access points. These products incorporate our proprietary technologies, including Smart Radio, Smart
QoS, Smart Mesh, SmartCell and Smart Scaling, to enable high performance in a variety of challenging operating conditions faced by service providers and enterprises.

Our products have been sold to over 16,000 end-customers worldwide. Our service provider end-customers include mobile operators, cable companies, wholesale operators and fixed-line carriers. Our enterprise
end-customers span a wide range of industries, including hospitality, education, healthcare, warehousing and logistics, corporate enterprise, retail, state and local government and public venues, such as stadiums, convention centers, airports and
major outdoor public areas.

Our revenue increased 98%, from $47.4 million for the first half of 2011 to $93.9 million for the first
half of 2012. Our revenue increased from $44.4 million in 2009 to $75.5 million in 2010 and to $120.0 million in 2011, representing a compound annual growth rate of 64%. Our performance improved from a net loss of $0.9 million for the first half of
2011 to net income of $24.4 million for the first half of 2012, which included $17.4 million of income related to the release of the valuation allowance on our net deferred tax assets. Our performance improved from a net loss of $10.0
million in 2009 to a net loss of $4.4 million in 2010 and to net income of $4.2 million in 2011.

We have focused since our inception in
2004 on developing products that combine industry standard Wi-Fi chip sets with our proprietary technology to deliver high performance Wi-Fi connectivity in challenging environments. We first commercialized our Wi-Fi technology in customer premise
equipment, or CPE, that performed the highly demanding task of delivering live television over Wi-Fi. In 2005 we began selling our Smart Wi-Fi CPE products to broadband operators for Internet Protocol television, or IPTV, distribution within a home.

Following the launch of our CPE products, we began to apply the expertise that we gained in delivering a Wi-Fi solution for home use to
address the capacity and coverage requirements of service providers and midsized enterprises. In late 2007, we first introduced our carrier-class ZoneFlex product line. ZoneFlex integrates our Smart Wi-Fi technologies into a set of access points and
controllers that provide cost-effective, highly reliable and scalable solutions to service providers and enterprises.

In connection with the launch of our ZoneFlex product line we began to significantly increase our
investments in our service provider and enterprise sales and marketing activities. At the same time we began to shift focus away from our CPE products. CPE revenue was less than 5% of total revenue in the first quarter of 2012 and we expect this
revenue to decline as a percentage of total revenue in future periods.

As demand for our products from service providers increased, we
recognized the need to enable service providers to integrate their Wi-Fi and cellular network infrastructures. We therefore significantly increased our research and development activities to address network integration requirements of service
providers. Consistent with that focus, we acquired the business of IntelliNet Technologies, Inc., or IntelliNet, for total consideration of $15.6 million, which increased our ability to manage and control subscriber traffic across Wi-Fi and cellular
networks.

We launched our SmartCell gateway in the first quarter of 2012 to enable service providers to support and manage our Smart
Wi-Fi access points and to serve as a platform for integration of Wi-Fi and other services into the service provider network infrastructure. While this product was designed to address specific requirements of service providers, we generally develop
and sell the same products for both our service provider and enterprise end-customers. This approach to our products provides us maximum leverage from our research and development and sales and marketing investments with respect to service providers
and enterprises.

We target both service providers and enterprises that require carrier-class Wi-Fi solutions through our global force
of sales personnel and systems engineers. They work with more than 5,300 value-added resellers and distributors, which we collectively refer to as channel partners, to reach and service our end-customers. Our channel partners provide lead
generation, pre-sales support, product fulfillment and, in certain circumstances, post-sales customer service and support. In some instances, service providers may also act as a channel partner for sales of our solutions to enterprises. Our sales
personnel and systems engineers typically engage directly with selected large service providers and enterprises whether or not product fulfillment involves our channel partners. In contrast, the majority of our enterprise sales are originated and
completed by our channel partners with little or no direct engagement with us.

Service providers typically require long sales cycles,
which generally range between one and three years, but can be longer. The sale to a large service provider usually begins with an evaluation, followed by one or more network trials, followed by vendor selection and finally deployment and testing. A
large service provider will frequently issue a request for proposals to shortlist competitive suppliers prior to the network trials. Completion of several of these steps is substantially outside of our control, which causes our revenue patterns from
large service providers to vary widely from period to period. After initial deployment, subsequent purchases of our products typically have a more compressed sales cycle. The service providers that we consider to be primarily end-customers produced
approximately a quarter of our revenue in 2011. Sales cycles for enterprises are typically less than 90 days.

We are a global business
and, since 2009, more than 60% of our annual revenue has been generated outside of the United States. Due primarily to the size of large service provider orders, the amount of revenue from a region may vary significantly from period to period. For
example, in 2011, 37% of our revenue was generated from the Americas region, 35% was generated from the Asia Pacific, or APAC, region and 28% was generated from the Europe, Middle East and Africa, or EMEA, region. However, during the first half of
2012, 42% of our revenue was generated from the Americas, 37% was generated from the APAC region, and 21% was generated from the EMEA region. We derive revenue from sales of our products and from services, which are primarily maintenance and
support. Over 90% of our revenue is from product sales.

We outsource the manufacturing of our hardware products, including all of our access points and
controllers, to contract manufacturers. We outsource the warehousing and delivery of our products to a third-party logistics provider for worldwide fulfillment. We perform quality assurance and testing at our Sunnyvale, California facilities.

We believe the market for our Smart Wi-Fi solutions is growing rapidly and our intention is to continue to invest for long-term growth.
We expect to continue to invest heavily in research and development to expand the capabilities of our solutions with respect to services providers and enterprises. We also plan to continue to make significant investments in our field sales and
marketing activities, both by increasing our service provider focused direct sales force and by expanding our network of channel partners.

Key Components of Our Results of Operations and Financial Condition

Revenues

We generate revenue from the sales of our products and services. As discussed
further in Critical Accounting Policies and EstimatesRevenue Recognition below, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and
collectability is reasonably assured.

Our total revenue is comprised of the following:

Product Revenue. The majority of our product revenue is generated from sales of our products, which predominately
includes access points and controllers as well as corresponding controller licenses. We generally recognize product revenue on sales to distributors customers and at the time of shipment for all other customers, provided that all other revenue
recognition criteria have been met.

Service Revenue. Service revenue is generated primarily from
post-contract support, or PCS, and includes software updates on a when and if available basis, telephone and internet access to technical support personnel and hardware support. PCS terms are typically one year to five years and we recognize service
revenue over the contractual service period.

Cost of Service Revenue. Cost of service revenue primarily includes personnel costs, including
stock-based compensation, and certain allocated costs for facilities and other expenses associated with our global support organization.

Operating Expenses

Research and
Development. Research and development expense consists primarily of personnel costs, including stock-based compensation, for employees and contractors engaged in research, design and development activities, as well as
costs for prototype-related expenses, product

certification, travel, depreciation, recruiting and allocated costs for certain facilities and benefits costs allocated based on headcount. We believe that continued investment in research and
development and our products is important to attaining our strategic objectives. We expect research and development expense to increase in absolute dollars as we continue to invest in our future products and services, although our research and
development expense may fluctuate as a percentage of total revenue.

Sales and Marketing. Sales and
marketing expense consists primarily of personnel costs, commission costs and stock-based compensation for employees and contractors engaged in sales and marketing activities. Commission costs are calculated on shipment and expensed in the same
period. Sales and marketing expense also includes the costs of trade shows, marketing programs, promotional materials, demonstration equipment, travel, depreciation, recruiting and allocated costs for certain facilities and benefits costs allocated
based on headcount. We expect sales and marketing expense to continue to increase in absolute dollars as we increase the size of our sales and marketing organizations in support of our investment in our growth opportunities, although our sales and
marketing expense may fluctuate as a percentage of total revenue.

General and Administrative. General and
administrative expense consists primarily of personnel costs and stock-based compensation for our executive, finance, legal, human resources and other administrative employees. In addition, general and administrative expenses include outside
consulting, legal, audit and accounting services, depreciation and facilities and other supporting overhead costs not allocated to other departments. We expect general and administrative expense to increase in absolute dollars following the
completion of our initial public offering due to additional legal fees, and accounting, insurance and investor relations, and other costs associated with being a public company, as well as due to costs associated with growing our business and
pending litigation, although our general and administrative expense may fluctuate as a percentage of total revenue.

Interest Expense

Interest expense consists of interest on our outstanding debt and amortization of loan fees. All outstanding debt was repaid in
full by the end of June 2012.

Other Expense, net

Other expense, net consists primarily of the change in fair value of our redeemable convertible preferred stock warrant liability. Redeemable convertible preferred stock warrants are classified as a liability on
our consolidated balance sheets and their estimated fair value is re-measured at each balance sheet date with the corresponding change recorded within other expense, net. If the fair value of our common stock increases, the fair value of the warrant
liability will increase, which would also increase the charges recognized through other expense, net.

Income Tax Expense

During the quarter ended June 30, 2012, we concluded that it was more likely than not that we would be able to realize the benefit of the U.S.
federal and state deferred tax assets in the future. As a result, we reduced the valuation allowance on our net deferred tax assets by $17.5 million at June 30, 2012. The release of the valuation allowance contributed a benefit of $17.4 million to
the net income tax benefit of $17.3 million for the first half of 2012.

Significant management judgment is required in determining the
period in which the reversal of a valuation allowance should occur. We are required to consider all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items, in
determining whether a full or partial release of our valuation allowance is required. We are

also required to schedule future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance, which further requires
the exercise of significant management judgment. As a result, there can be no assurance that there will be a release in future periods of the remaining amount of our valuation allowance, or that an increase in such allowance may not be required in
the future.

Results of Operations

The following tables set forth our results of operations for the periods presented as a percentage of total revenue for those periods. The period-to-period comparison of financial results is not necessarily
indicative of future results.

The increase in product revenue was primarily driven by an increase of $48.4 million in ZoneFlex product sales
to new and existing customers offset slightly by a decrease of $5.0 million in CPE product sales due to increased focus on our higher margin products and shift away from sales of our CPE products. The increase in ZoneFlex product sales was due
to increased adoption by our end-customers of our ZoneFlex products. Our total number of end-customers increased from approximately 8,100 at June 30, 2011 to approximately 16,000 at June 30, 2012.

The increase in service revenue is primarily related to the increase in PCS sales in connection with the increased sales of our ZoneFlex products.
Service revenues are amortized over the contractual service period.

The Americas and APAC contributed substantially all of the
revenue increase between the periods. Revenue from all regions increased during the first half of 2012 primarily due to our investment in increasing the size of our sales force and the number of channel partners in each region focused on selling our
ZoneFlex product. APAC revenues were positively impacted by sales by one of our distributors to a large service provider. The growth in the EMEA region was offset by a decline of approximately $3.6 million in revenues from CPE products.

Gross margin increased 6.4 percentage points. The increase of 5.9 percentage points in product gross margin was
primarily due to a shift in product mix, with an increase in our higher margin ZoneFlex products compared to our lower margin CPE products, improved operational efficiencies, and reduced CPE inventory write downs due to product end of life in the
prior year partially offset by increased amortization of purchased technology resulting from our purchase of IntelliNet. The increase of 19.3 percentage points in service gross margin was primarily a result of a 155.8% growth in service revenue
offset, in part, by an increase in the cost arising from our investment in increasing our service operations to manage anticipated growth.

Research and Development

Six MonthsEnded June 30,

2011

2012

Change

Amount

Amount

Amount

%

(dollars in thousands)

Research and development

$

10,760

$

18,187

$

7,427

69.0

%

% of revenue

22.7

%

19.4

%

The increase in research and development expenses was primarily attributable to increases in personnel and related
costs of $4.5 million, which included stock-based compensation of $0.4 million, as we continued to add headcount and increase our investments in future product offerings. Research and development expenses also increased due to higher depreciation of
$0.5 million, increased product design and implementation of $1.2 million and increased other engineering costs of $1.2 million. We expect our research and development costs to continue to increase in absolute dollars, as we continue to invest
in developing new products and developing new versions of our existing products.

Sales and Marketing

Six MonthsEnded June 30,

2011

2012

Change

Amount

Amount

Amount

%

(dollars in thousands)

Sales and marketing

$

13,299

$

24,910

$

11,611

87.3

%

% of revenue

28.1

%

26.5

%

The increase in sales and marketing expenses was primarily attributable to increases in headcount and related
expenses as we increase our sales organization as part of our strategy to expand our reach into new service providers and channel partners. Personnel and related expenses increased $5.8 million, including increased commission expenses of $1.1
million related to our increased sales and stock-based compensation of $0.4 million. Third-party commission expense

increased by $2.4 million primarily related to our expansion in the Japanese market. Marketing expenses increased $1.1 million and travel expenses increased $0.9 million due to an increase in
tradeshows and public relations activities as we continue to focus our efforts on product marketing. Other sales and marketing expenses increased $1.4 million in recruiting, consulting, general departmental expenses and allocated costs due to
increased activity and headcount. We expect that sales and marketing expenses will continue to increase in absolute dollars as we continue our strategy of adding sales personnel to target service providers and enterprises.

General and Administrative

Six MonthsEnded June 30,

2011

2012

Change

Amount

Amount

Amount

%

(dollars in thousands)

General and administrative

$

3,070

$

8,437

$

5,367

174.8

%

% of revenue

6.5

%

9.0

%

The increase in general and administrative expenses was primarily attributable to an increase in personnel costs of
$2.3 million which includes stock-based compensation of $1.3 million. General and administrative costs also increased due to higher professional services costs of $2.0 million and other general expenses of $1.1 million in depreciation, facilities
and other supporting overhead costs not allocated to other departments. The increases were attributable to our efforts to support the growth of our business and to start preparing to become a publicly held company. We expect that general and
administrative expenses will continue to increase in absolute dollars due primarily to costs associated with being a public company and to support the growth in our business.

Interest Expense

Six Months EndedJune 30,

2011

2012

Change

Amount

Amount

Amount

%

(dollars in thousands)

Interest expense

$

450

$

472

$

22

4.9

%

Interest expense relates to our loans payable that accrue interest at fixed rates of between 7.0% and 9.5% per
year. As a result, our interest expense was relatively flat between the first halves of 2011 and 2012. All loans were paid off in June 2012.

Other Expense, net

Six Months EndedJune 30,

2011

2012

Change

Amount

Amount

Amount

%

(dollars in thousands)

Other expense, net

$

360

$

967

$

607

168.6

%

Other expense, net increased from the first half of 2011 to the first half of 2012 primarily due to increases from
the revaluation of our outstanding redeemable convertible preferred stock warrant.

The income tax benefit in the first half of 2012 primarily relates to the release of our valuation allowance of
$17.4 million, offset by minor amounts of state and foreign taxes.

The release of the valuation allowance is based on our determination
during the quarter ended June 30, 2012 that it was more likely than not that we would be able to realize the benefit of the U.S. federal and state deferred tax assets in the future. We based this conclusion on historical and projected operating
performance, as well as our expectation that our operations will generate sufficient taxable income in future periods to realize the tax benefits associated with the deferred tax assets.

Years Ended December 31, 2010 and 2011

Revenues

Years Ended December 31,

2010

2011

Change

Amount

% ofRevenue

Amount

% ofRevenue

Amount

%

(dollars in thousands)

Revenues:

Product

$

73,108

96.8

%

$

114,684

95.6

%

$

41,576

56.9

%

Service

2,381

3.2

%

5,339

4.4

%

2,958

124.2

%

Total

$

75,489

100.0

%

$

120,023

100.0

%

$

44,534

59.0

%

Years Ended December 31,

2010

2011

Change

Amount

% ofRevenue

Amount

% ofRevenue

Amount

%

(dollars in thousands)

Revenue by geographic region:

Americas

$

24,038

31.8

%

$

45,154

37.6

%

$

21,116

87.8

%

APAC

27,485

36.4

%

41,658

34.7

%

14,173

51.6

%

EMEA

23,966

31.8

%

33,211

27.7

%

9,245

38.6

%

Total

$

75,489

100.0

%

$

120,023

100.0

%

$

44,534

59.0

%

The increase in product revenue from 2010 to 2011 was primarily driven by an increase of $52.9 million in ZoneFlex
product sales to new and existing customers, offset in part by a decrease of $11.3 million in CPE product sales due to increased focus on our higher margin products and a shift away from sales of our CPE products. The increase in product sales was
due to increased adoption by end-customers of our ZoneFlex products. Our total number of aggregate end-customers increased from approximately 5,600 at December 31, 2010 to approximately 11,600 at December 31, 2011.

The increase in service revenue is primarily related to the increase over time in PCS sales in connection with the sales of our ZoneFlex products,
as service revenues are amortized over the contractual service period.

The Americas and APAC regions contributed the largest portion of the revenue increase between the
periods because of their larger and more established sale force. Revenue from all regions increased during 2011 primarily due to our investment in increasing the size of our sales force and the number of channel partners in each region. The growth
in the Americas, APAC and EMEA regions was slightly offset by a decline of approximately $2.3 million, $6.0 million and $3.0 million, respectively, in revenues from CPE products due to increased focus on our higher margin products and a shift away
from sales of our CPE products.

Cost of Revenues and Gross Margin

Years EndedDecember 31,

2010

2011

Change

Amount

Amount

Amount

%

(dollars in thousands)

Cost of revenues:

Product

$

34,039

$

44,705

$

10,666

31.3

%

Service

1,705

2,502

797

46.7

%

Total cost of revenues

$

35,744

$

47,207

$

11,463

32.1

%

Years Ended December 31,

2010

2011

Change

Amount

GrossMargin

Amount

GrossMargin

Amount

GrossMargin

(dollars in thousands)

Gross profit:

Product

$

39,069

53.4

%

$

69,979

61.0

%

$

30,910

7.6

Service

676

28.4

%

2,837

53.1

%

2,161

24.7

Total gross profit

$

39,745

52.6

%

$

72,816

60.7

%

$

33,071

8.1

Gross margin increased 8.1 percentage points. The increase of 7.6 percentage points in product gross margin was
primarily due to a shift in product mix, with an increase in our higher margin ZoneFlex products compared to our lower margin CPE products and improved operational efficiencies. The increase of 24.7 percentage points in service gross margin was
primarily a result of a 124.2% growth in service revenue while cost of service revenue only increased by 46.7% due to increased operating efficiencies in our service and support group.

Research and Development

Years EndedDecember 31,

2010

2011

Change

Amount

Amount

Amount

%

(dollars in thousands)

Research and development

$

19,256

$

24,892

$

5,636

29.3

%

% of revenue

25.5

%

20.7

%

The increase in research and development expenses from 2010 to 2011 was primarily attributable to increases in
personnel and related costs of $4.7 million, which included increased stock-based compensation of $0.6 million, as we continued to add headcount and increase our investments

in future product offerings and by an aggregate of $0.9 million due in part to increased depreciation and other allocations.

Sales and Marketing

Years EndedDecember 31,

2010

2011

Change

Amount

Amount

Amount

%

(dollars in thousands)

Sales and marketing

$

19,185

$

32,659

$

13,474

70.2

%

% of revenue

25.4

%

27.2

%

The increase in sales and marketing expenses from 2010 to 2011 was primarily attributable to increases in headcount
and related expenses of $7.5 million, including commission expenses of $2.3 million related to increase in revenue and increased stock-based compensation expense of $0.2 million as we expand our sales organization to support our revenue growth.
Third party commission expense increased by $1.8 million primarily due to expansion into the Japanese market. Marketing expenses increased $1.0 million due to an increase in tradeshows and public relations activities. Travel expenses increased $1.2
million as a result of the increased marketing activities as well as our increased sales headcount. Other sales and marketing costs, including consulting, depreciation and allocations, increased $2.0 million to support our continued growth and
additional headcount.

General and Administrative

Years EndedDecember 31,

2010

2011

Change

Amount

Amount

Amount

%

(dollars in thousands)

General and administrative

$

4,231

$

8,524

$

4,293

101.5

%

% of revenue

5.6

%

7.1

%

The increase in general and administrative expenses from 2010 to 2011 was primarily attributable to an increase in
personnel related costs of $1.0 million which includes increased stock-based compensation of $0.2 million, and to increased professional services costs of $2.0 million, including increased legal expenses of $1.6 million due principally to defending
several lawsuits. We also incurred an increase of $0.6 million in consulting expenses related to the growth in our business and an increase of $0.9 million in other general and administrative expenses including depreciation, travel, facilities, and
other overhead costs to support the business.

Interest Expense

Years EndedDecember 31,

2010

2011

Change

Amount

Amount

Amount

%

(dollars in thousands)

Interest expense

$

1,011

$

1,025

$

14

1.4

%

Interest expense primarily relates to our loans payable that accrue interest at fixed rates of between 7.0% and
9.5% per year. Loans outstanding during the two years did not substantially change.

The following tables set forth unaudited quarterly consolidated statements of operations data for the six quarters ended June 30, 2012, as well as the percentage that each line item represents of total
revenue. We have prepared the statement of operations for each of these quarters on the same basis as the audited consolidated financial statements included in this prospectus. In the opinion of management, the quarterly financial information
reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data. This information should be read in conjunction with the audited consolidated financial statements and related notes
included elsewhere in this prospectus. These quarterly operating results are not necessarily indicative of our operating results for any future period.

The table below shows gross profit as a percentage of each component of revenue, referred to as gross margin.

March 31,2011

June 30,2011

September 30,2011

December 31,2011

March 31,2012

June 30,2012

Gross Margin by Component of Revenue:

Product

55.9

%

60.0

%

62.2

%

63.5

%

63.3

%

64.7

%

Service

38.7

%

46.8

%

58.4

%

60.0

%

61.7

%

63.0

%

Total gross margin

55.1

%

59.4

%

62.0

%

63.3

%

63.2

%

64.6

%

The following table sets forth unaudited quarterly consolidated statements of stock-based compensation expense data
for the six quarters ended June 30, 2012, as well as the percentage that stock-based compensation represented of total revenue.

March 31,2011

June 30,2011

September 30,2011

December 31,2011

March 31,2012

June 30,2012

(unaudited)

Stock-based compensation expense

$

366

$

413

$

691

$

798

$

918

$

1,960

% of revenues

1.7

%

1.6

%

2.2

%

1.9

%

2.0

%

4.0

%

Our revenue increased in each quarter presented. For the fourth quarter of 2011 and first quarter of 2012, the
increase in product revenue was primarily driven by sales by one of our distributors to a large service provider. We generally expect an increase in revenues from enterprise business activity from our education and hospitality end-customers in our
second and third quarters. For this reason sequential quarter revenue comparisons may not always be meaningful.

In addition, we also
expect that our quarterly revenues may continue to be affected by orders from large service providers. We expect operating income to be similarly affected by large orders from service providers because our expenses are relatively fixed in the
near-term.

Total gross profit increased in each quarter presented. Our gross margin is primarily affected by
shifts in the mix of sales between higher margin ZoneFlex products compared to lower margin CPE products. Gross margins started to stabilize in the fourth quarter of 2011 as the sales of CPE products were no longer a significant portion of to total
sales.

Total operating expenses increased sequentially in each quarter presented due to the addition of personnel in research and
development, sales and marketing and general and administrative organization in connection with the significant expansion of our business. Research and development expenses increased as a percentage of revenue in the first quarter of 2012 primarily
due to increased engineering costs as we continue to invest in developing new products and developing new versions of existing products. Sales and marketing expense increased significantly in the fourth quarter of 2011 primarily due to higher sales
and the resulting increase in commissions, third-party commission expense related to expansion in the Japanese market and sales and marketing program expense as we expanded operations. General and administrative expense increased in the second
quarter of 2012 primarily due to increased headcount and outside services fees related both to the overall growth of our business and in preparation for our initial public offering as well as an increase in stock-based compensation of $1.0 million,
or 2.0% of revenues. Without the impact of stock-based compensation expense, our operating margins have been fairly consistent for the three quarters ended June 30, 2012.

Liquidity and Capital Resources

We had cash and cash equivalents of $31.3 million at June 30,
2012. Cash and cash equivalents consist of cash and money market funds. Cash held overseas was $1.5 million. We did not have any short-term or long-term investments.

Since inception, we have primarily financed our operations and capital expenditures through private sales of preferred stock, debt and cash flows from our operations. We have raised an aggregate of $75.8 million in
net proceeds from the issuance of our preferred stock.

We also borrowed approximately $11.9 million under a loan and security agreement
with a financial institution in 2007 and 2008 which was repaid in full in June 2012.

In October 2011, we acquired certain assets of
IntelliNet for total cash consideration of $6.0 million and future consideration of up to $7.0 million. During the second quarter of 2012, we paid $1.0 million of the future consideration. This acquisition was partially financed through a short-term
credit facility for $5.0 million, which was repaid in full in January 2012.

We plan to continue to invest for long-term growth. We
anticipate that these investments will continue to increase in absolute dollars. We believe that our existing cash and cash equivalents balance together with cash proceeds from operations will be sufficient to meet our working capital requirements
for at least the next 12 months.

We generated $14.3 million of cash from operating activities in the first half of 2012 resulting from our net income of $24.4 million, increased by changes in our operating assets and liabilities of $1.3 million
and offset in part by non-cash net benefits of $11.4 million. The non-cash net benefit consisted primarily of the release of our valuation allowance for deferred income taxes of $17.4 million, partially offset by non-cash charges consisting mainly
of depreciation and amortization of $2.2 million, stock-based compensation of $2.9 million, revaluation of contingent liabilities of $0.3 million and revaluation of our preferred stock warrants of $0.4 million. The net change in our operating assets
and liabilities was the result of a net increase in accounts payable, accrued compensation, and accrued liabilities of $4.2 million relating to the growth in our business, and an increase in deferred revenues of $4.1 million primarily due to
increases in service sales, partially offset by increased inventories of $3.9 million and accounts receivable of $2.5 million arising from the growth of our business.

We generated $1.4 million of cash from operating activities in the first half of 2011 resulting from non-cash charges of $1.7 million and changes in our operating assets and liabilities of $0.6 million, partially
offset by our net loss of $0.9 million. Non-cash charges consisted of stock-based compensation of $0.8 million, depreciation and amortization of $0.7 million, and revaluation of our preferred stock warrants of $0.2 million. The net change in our
operating assets and liabilities was primarily due to a net increase in accounts payable, accrued compensation, and accrued liabilities of $0.7 million associated with the growth in our business, a decrease in inventory of $3.9 million and decreased
distributor stock of $0.2 million partially offset by increased accounts receivable of $4.4 million arising from the growth of our business.

We generated $15.0 million of cash from operating activities in 2011 resulting from our net income of $4.2 million, increased by non-cash charges primarily consisting of $5.4 million and changes in our operating
assets and liabilities of $5.4 million. Non-cash charges consisted of stock-based compensation of $2.3 million, depreciation and amortization of $2.1 million and revaluation of preferred stock warrants of $0.9 million. The net changes in our
operating assets and liabilities was the result of increased accounts payable and accrued expenses of $7.5 million relating to the growth in our business, increased accrued vacation due to our increased headcount and increased deferred rent for new
facilities, increased deferred revenue of $6.9 million due to increased PCS sales, increase deferred product sales and increased stock at our distributors, and decreased inventories of $1.3 million as part of our effort to increase operational
efficiency, offset in part by increased accounts receivable of $10.0 million due to increased sales.

We used $6.6 million of cash in
operating activities in 2010 resulting from our net loss of $4.4 million and increased inventories of $9.5 million to satisfy growing demand partially offset in part by non-cash depreciation and amortization of $1.1 million, non-cash stock-based
compensation of $1.2 million and increased accounts payable and accrued expenses of $5.3 million relating to the growth in the business.

Investing Activities

Our primary
investing activities have consisted of purchases of property and equipment related to leasehold improvements, technology hardware and tooling to support our growth in headcount and to support operations and our corporate infrastructure. Purchases of
property and equipment may vary from period to period due to the timing of the expansion of our operations.

Cash used in investing
activities in the first half of 2012 was $5.7 million, of which $3.8 million related to purchases of property and equipment, $1.0 million was a partial payment on future

consideration for the purchase of IntelliNet and $0.8 million related to refundable deposits on new facility leases.

Cash used in investing activities in the first half of 2011 was $1.3 million, all of which was for the purchase of property and equipment.

Cash used in investing activities in 2011 was $9.7 million, of which $6.0 million was for the acquisition of IntelliNet and $3.7 million was related to purchases of property and equipment.

Cash used in investing activities in 2010 was $1.6 million, all of which was for the purchase of property and equipment.

Financing Activities

Our financing
activities have consisted primarily of net proceeds from the issuance of preferred stock and, to a much lesser extent, the issuance of common stock upon exercise of employee stock options.

We generated $11.5 million of cash from financing activities during the first half of 2012 primarily from the sale of $25.0 million of our Series G
preferred stock financing and $0.2 million in proceeds from the exercises of stock options, offset in part by repayment of $13.6 million under our credit facilities and Series G preferred stock issuance costs of $0.1 million.

We used $0.5 million of cash from financing activities during the first half of 2011 primarily due to repayment of bank borrowings.

We generated $4.0 million of cash from financing activities in 2011, primarily due to a net increase of $3.4 million in borrowings under our credit
facilities and $0.6 million in proceeds from the exercises of stock options.

We used $0.5 million of cash in financing activities in
2010 due to a net repayment of $0.8 million under our credit facilities, offset in part by $0.3 million in proceeds from the exercises of stock options.

Contractual Obligations

Leases

We lease our headquarters in Sunnyvale, California and other locations worldwide under non-cancelable operating leases that expire at various dates
through fiscal 2022. The following table summarizes our contractual obligations at June 30, 2012, including leases:

cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products. We periodically
review the potential liability and as of June 30, 2012, we have no significant accruals recorded. Our financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any
unrecorded liabilities incurred.

Warranties and Indemnifications

We offer a limited lifetime hardware warranty on our indoor wireless LAN products and a limited warranty for all other products for a period of up
to one year for hardware and 90 days for software. In accordance with the Financial Accounting Standards Boards, or FASBs, Accounting Standards Codification, or ASC 450-30, Loss Contingencies, we record an accrual when we believe it is
estimable and probable based upon historical experience. We record a provision for estimated future warranty work in cost of goods sold upon recognition of revenues and we review the resulting accrual regularly and periodically adjust it to reflect
changes in warranty estimates.

We indemnify our directors and officers for certain events or occurrences, subject to certain limits,
while the director is or was serving at the companys request in such capacity. The term of the indemnification period is for the directors term of service. We may terminate the indemnification agreements with our directors upon the
termination of their services as directors of the company, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. The maximum amount of potential future indemnification is
unlimited; however, we have a director insurance policy that limits our exposure. We believe the fair value of these indemnification agreements is minimal.

We indemnify our channel partners against certain claims alleging that our products, excluding custom products and/or custom support, furnished under the agreement between the company and such channel partners
infringe a patent, copyright, trade secret, or trademark, provided that the channel partner promptly notifies us in writing of the claim and cooperates with us in, and grants us the authority to control, the defense and any related settlement.

Major Distributors

The following distributors represented greater than 10% but not more than 25% of our revenue for 2011 and the six months ended June 30, 2012: Mitsui Electronics Corporation, ScanSource Security Distribution, Inc.
and Synnex Corporation.

Our agreements with these distributors were made in the ordinary course of our business and may be terminated
with or without cause by either party with advance notice. Although we believe we would experience some short-term disruption in the distribution of our products if any of these agreements were terminated, we believe such terminations would not have
a material adverse effect on our financial results and that alternative distributors, resellers and other distribution channels exist to deliver our products to our end-customers.

Critical Accounting Policies, Estimates and Internal Control Over Financial Reporting

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us
to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and

various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

We believe that the assumptions and estimates associated with revenue recognition, inventory, valuation of goodwill, intangible assets, income
taxes and stock-based compensation have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant
accounting policies, please see Note 1 of the accompanying notes to our consolidated financial statements.

In connection with the
contemporaneous audit of our consolidated financial statements for the years ended December 31, 2011 and 2010, our independent registered public accountants indentified a material weakness and several significant deficiencies in our internal
control over financial reporting. For additional information, see the risk factor Our independent registered public accountants have identified a material weakness and several significant deficiencies in our internal control over financial
reporting  on page 17 of this prospectus.

Revenue Recognition

We generate revenue from the sales of hardware with embedded software and related PCS through a direct sales force and indirect relationships with
our channel partners.

Revenue is recognized when all of the following criteria are met:



Persuasive evidence of an arrangement exists. We rely upon sales contracts and purchase orders to determine the existence of
an arrangement.



Delivery has occurred. Delivery is deemed to have occurred when title has transferred. We use shipping documents to verify
transfer of title.



The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the terms associated with the
transaction.



Collectability is reasonably assured. We assess collectability based on credit analysis and payment history.

We recognize product revenue at the time title transfers provided that all other revenue recognition criteria have
been met.

Certain of our distributors that stock our product are granted stock rotation rights as well as rebates for sales of our
products. Therefore, the arrangement fee for this group of distributors is not fixed and determinable when products are shipped and revenue is therefore deferred until our products are shipped to the distributors customer.

Certain of our arrangements are multiple-element arrangements which consist of hardware products with embedded software and PCS. Our hardware with
the embedded software, which is a proprietary operating system that together with the hardware delivers the functionality desired by our customers, is considered a separate unit of accounting from PCS as our customers often buy our hardware products
without PCS. For multiple-element arrangements, we allocate revenue to each unit of accounting based on an estimated selling price at the inception of the arrangement. The total arrangement consideration is allocated to each separate unit of
accounting using the relative estimated selling prices of each unit. We limit the amount of revenue recognized for delivered elements to an amount that is not contingent upon future delivery of additional products or service.

To determine the estimated selling price in multiple-element arrangements, we first look to establish vendor specific objective evidence, or VSOE,
of the selling price using the prices charged for

a deliverable when sold separately. If VSOE of the selling price cannot be established for a deliverable, we look to establish third-party evidence, or TPE, of the selling price by evaluating the
pricing of similar and interchangeable competitor products or services in standalone arrangements. However, as our products contain a significant element of proprietary technology and offer substantially different features and functionality from our
competitors, we have been unable to obtain comparable pricing information with respect to our competitors products. Therefore, we have not been able to obtain reliable evidence of TPE of the selling price. If neither VSOE nor TPE of the
selling price can be established for a deliverable, we establish best estimate selling price, or BESP, by reviewing historical transaction information and considering several other internal factors including discounting and margin objectives. We
have established VSOE of the selling price of PCS through an analysis of the historical separate sales of PCS when PCS is renewed, noting that such sales have occurred at consistent prices and with a high level of concentration with respect to such
pricing. Furthermore, we have established BESP of the selling price of our hardware products with embedded software based on an analysis of our historical separate sales of hardware products with embedded software. The concentration of such pricing
was not sufficient to assert VSOE of the selling price, and accordingly we have determined that we can only demonstrate BESP of the selling price.

We make certain estimates and maintain allowances for sales returns, stock rotation, and other programs based on our historical experience. To date, these estimates have not been significant.

We recognize services revenue from PCS ratably over the contractual service period, which is typically one to five years. Other services revenue is
recognized as the services are rendered and has not been significant to date.

Revenue is reported net of sales taxes. Shipping charges
billed to channel partners are included in revenue and related costs are included in cost of revenue. To date, shipping charges have not been significant. After receipt of a channel partner order, any amounts billed in excess of revenue recognized
are recorded as deferred revenue.

In October 2009, the FASB amended the accounting standards for revenue recognition to exclude
tangible products containing software components and non-software components that function together to deliver the tangible products essential functionality from the scope of the software revenue recognition guidance. Concurrently, the FASB
also amended the accounting standards for multiple deliverable revenue arrangements to:



provide updated guidance on whether multiple deliverables exist, how the deliverables in an arrangement should be separated, and how the arrangement
consideration should be allocated among its elements;



require an entity to allocate revenue in an arrangement that has separate units of accounting using BESP of deliverables if a vendor does not have VSOE or TPE of
fair value; and



eliminate the use of the residual method and require an entity to allocate revenue using the relative selling price method to the separate units of accounting.

We elected to early adopt these standards in the first quarter of fiscal 2010, and the standards were applied
prospectively on all transactions originating or materially modified after January 1, 2010. Revenue and net income for 2010 were higher by $2.8 million as a result of adoption of the new revenue recognition accounting standards.

Inventories are carried at the lower of standard cost, which approximates actual cost on a first-in, first-out basis, or market or estimated net realizable value. We evaluate inventory for excess and obsolete
products based on managements assessment of future demand and market conditions. We subcontract manufacturing on substantially all of our products. At December 31, 2010 and 2011, and at June 30, 2012, inventories were predominately
comprised of finished goods.

Goodwill

We evaluate goodwill for impairment annually in the fourth quarter of our fiscal year or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events
that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or a significant decrease in expected cash flows. As of December 31, 2011,
no impairment of goodwill has been identified.

In September 2011, the FASB issued an accounting standards update that permits entities
to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill
impairment test. We adopted this new guidance as of January 1, 2012, on a prospective basis. We do not expect that this guidance will materially impact the consolidated financial statements.

Intangible Assets, Net

Acquired
intangible assets consist of existing technology resulting from acquisitions. Acquired intangible assets are recorded at fair value, net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated
useful lives.